An “unprecedented” spike in alumina prices contributed to Aluminium Bahrain’s (Alba) annual profit falling by more than third compared to corresponding 2017 figures, its chief executive officer, Tim Murray, said.
Murray described 2018 as a “challenging year” for Alba, one of the world’s largest aluminium smelters, after prices of the material rose dramatically to dent Alba’s bottom line.
The price hike saw Alba’s income drop markedly from $245.9m (BHD92.5m) in 2017 to $158.9m (BHD59.8m) in 2018, representing an annual decline of 35%.
Pre-tax profit dropped to $228.6m (BD85.9m) in 2018, down 36% from $358.1m (BD134.6m) at the same point a year ago. The negative impact of higher alumina prices and lower sales pushed Alba into the red for Q4 2018, with a $47m (BD17.5m) loss for the period. The amount is a 175% reduction compared to the fourth quarter of 2017, when Alba reported net income of $62.4m (BD23.4m).
While the underlying numbers are less than satisfactory for Alba, the smelter said it “significantly” improved several operational benchmarks in 2018 after halving its loss-time injury figure from 2017. Alba also commissioned its Line 6 Smelter ahead of schedule in 2018, and in doing so became the largest single-site aluminium smelter in the world. Overall progress on Line 6 now stands at 80%.
Alba also fired up Casthouse 4, described as the biggest furnace in the history of Bahrain, last year.
Looking to 2019, Murray said Alba would focus on Project Titan, its multi-year cost-cutting initiative that will see the business make savings of $100m (BD37.6m) by 2020.
Chairman of Alba’s board of directors, HE Shaikh Daij Bin Salman Bin Daij Al Khalif, praised the safety and aluminium production milestones achieved by the business.
“Despite the significant volatility in the financial markets, Alba had a strong finish in both safety and production, where [we] exceeded the one-million metric tonnes production mark for the first time in its history,” he said.