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Qatar Aluminum Manufacturing Company (Qamco) on Wednesday reported a net profit of QR 124 million for the first quarter of 2021 as compared to QR11 million for the same quarter of last year.
The company’s earnings per share (EPS) stood at QR 0.022 at the end of the first quarter of 2021 as compared to EPS of QR 0.002 at the end of the first quarter last year.
As the global markets started to show signs of recovery since later part of 2020, the aluminium industry also picked up its pace, whereby, sectors such as construction and automotive witnessed growth, and a renewed global demand for primary aluminium was noted, while the supply-side remained muted. All of these factors translated into a sequential growth in primary aluminium prices and improved margins.
Share of JV’s revenue increased 13 percent to reach QR639 million as compared to QR 565 million for the first quarter of 2020.
Earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased by 52 percent and reached QR252 million for the first quarter of 2021 in comparison to QR166 million for the same quarter last year.
Qamco’s improved financial results for the first quarter of 2021 against the same quarter of last year was largely attributed to the overall growth in average realised selling prices which increased by 15 percent in first quarter of 2021 against the same quarter of last year.
On the other hand, with flat production levels, sales volumes slightly declined by 1 percent and contributed QR9 million negatively to net profits for the first quarter of 2021 against the same quarter of last year.
Although sales volumes were marginally lower than last year, but Qamco’s JV was successful in selling 100 percent of value-added products (VAP) with no sales of standard ingots during the period. The shift from sales of standard ingots to VAP supported the overall evolution of EBIDTA margins.
The cost of goods sold for the first quarter of 2021 remained lower against the same quarter of last year, mainly on account of decline in raw material costs, and cost optimization initiatives which resulted in savings in manpower costs.
On overall basis, the decline in cost of goods sold contributed QR 20 million positively to the net profits for the first quarter of 2021 against the same quarter of last year.
Moreover, due to an overall decline in interest rates, JV’s finance costs for the first quarter of 2021 also declined by 57 percent against the first quarter of 2021, and contributed QR 24 million positively to Qamco’s net earnings for the first quarter of 2021 in comparison to for the first quarter of 2020.
Qamco’s financial position continued to remain robust with the liquidity position at the end of March 31, 2021 reaching QR669 million in form of cash and bank balances including proportionate share of cash and bank balances of the joint venture.
During, first quarter of 2021 QAMCO’s JV generated positive share of operating cash flows of QR 180 million, with a share of free cash flows of QR 133 million.
The company’s total assets at the end of the first quarter of 2021 stood at QR5.755 billion.
Qamco’s JV continues to maintain efficiency and cost competitiveness in terms of its production and operations.
Qamco’s JV is conducting Capex projects as per the planned Qamco schedule for the year, in line with the operational requirements.
The continued efforts to manage cost have reflected positively on JV’s operating cost structures while keeping Qamco’s JV on the lower side of the cost curve among global peers.
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29/04/2021
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