QAMCO posts net profit of QAR 13.3 million in Q4

Qatar Aluminium Manufacturing Company announced its financial results for the four-month period ended 31 March with a net profit of QAR 13.3 million. These results predominantly represent the share of net profit in QAMCO’s joint venture, Qatalum. QAMCO reported net profit of QAR 13.3 million for the four-month period ended 31 March 2019, with earnings per share of QAR 0.02. During the period, Qatalum operated under challenging market conditions, which affected the performance of the company, as metal market is volatile by nature. Firstly, there was a notable increase in the direct costs, mainly due to an increase in the cost of the raw materials, particularly Alumina prices. This has increased Qatalum’s operating costs, and decreased its operating margins substantially during December, 2018. Secondly, consumption of Aluminium in some industries were adversely affected due to stringent environmental restrictions. As a result, there was gradual decline in demand for Aluminium during this period. Furthermore, the sanctions imposed by the United States on a major Aluminium producer has resulted in increased Aluminium supply in some major markets. Overall, the lower demand due to environmental restrictions, and sanctions have significantly affected the Aluminium prices.

Nevertheless, from the beginning of 2019, Qatalum witnessed gradual improvement in operating costs due to lower raw material costs, as well as an improvement of Aluminum selling prices.

Furthermore, Qatalum together with its strategic partner, Hydro, maintained its position to market and sell all of its products and compete with international suppliers.
On the other hand, QAMCO has a strong asset position as of 31 March 2019, standing at QAR 5.7 billion, with cash and bank balances amounted to QAR 191.9 million.

Performance improvement efforts
With an objective of maximizing value to its shareholders, QAMCO is working closely with its joint venture Qatalum in a number of areas of value improvements. This includes cost and supply chain optimization, revenue enhancements, efficiency improvements and capital allocation. These efforts ensure that Qatalum will continue to maintain its position as one of theworld’s low cost Aluminium smelter.

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