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Tribune News Network
Doha
Qatar Aluminium Manufacturing Company (Qamco), a 50 percent joint venture partner in a successful smelter that produces premium high quality primary aluminium products in Qatar, on Thursday, announced that it has reported a net profit of QR12.3 million for the nine months of 2020, with earnings per share (EPS) of QR 0.002.
Qamco’s share of the revenue for the financial period amounted to QR1.6 billion, down by 14 percent, compared to nine months period of 2019.
Sales volume for the nine months period was marginally higher by 1 percent than last year, as Qamco’s joint venture (JV) swiftly shifted the production to standard ingots, whereas, the demand for premium aluminium products and alloys used by various industries declined.
Weakened demand on the back of economic slowdown and continued production surplus negatively affected the selling prices during 2020. Although, there were some recoveries in prices noted in the latter part of Q3-20, while the overall price sentiments remained negative throughout the nine months period of 2020.
Qamco JV’s average selling prices during the first nine months of 2020 fell by 16 percent, compared to the same period last year, and contributed QR292 million negatively to the net profits for the nine months period of 2020, as compared to the same period last year.
This was partially offset by the sales volumes, which positively contributed QR20 million to the nine-month net profits, as compared to last year.
Qamco’s share of JV’s EBITDA stood at QR439 million for the nine months period of 2020, down by 15 percent compared to the same period last year.
The EBITDA margins, however, remained resilient in the current turbulent market conditions and stood at 27.3 percent as compared to 27.5 percent for the first nine months of 2019.
The company’s JV was able to successfully contain its raw materials, energy, manpower and other direct costs by 12 percent for the first nine months of 2020 against the same period last year.
The overall decline in cost of goods sold contributed QR191 million positively to the net profits for the nine months period of 2020, as compared to the same period of 2019.
QAMCO’s share of deb t in the JV declined by 8 percent to reach QR2.2 billion as at September 30, 2020, compared to the balance as at December 31, 2019. The decline was mainly on account of principal repayment during the period.
During the first quarter of 2020, Qamco’s JV successfully refinanced its outstanding loan amounting to $1.3 billion for a period of five years. This refinancing deal is not only expected to bring free cash flows to the JV, but will also provide new avenues of flexibility to endure market volatilities, which in turn is expected to maximise shareholder value.
Qamco’s financial position continues to remain robust despite several macroeconomic headwinds, with the liquidity position at the end of September 30, 2020 reaching QR670 million in cash and bank balances including the proportionate share of cash and bank balances of the joint venture, after accounting for dividend payments for 2019.
During the period, Qamco’s JV generated positive share of operating cash flows of QR552 million, down by 43 percent compared to the first nine months of 19, with a share of free cash flows of QR 346 million, up by 34 percent compared to the same period of last year.
Commenting on the financial results, Qamco Chairman Abdulrahman Ahmad Al Shaibi said, “Despite the macroeconomic headwinds affecting the global markets, Qamco continued to rely on its core strengths, based on which Qamco’s JV managed to remain profitable in a market where global aluminium prices continued to show downwards trends amid unprecedented challenges posed to businesses globally due to COVID-19 pandemic.”
“In response to limit the spread of COVID-19 pandemic, our joint venture continued to implement measures to ensure safety and business continuity.
On the other hand, our sales and marketing partner, diligently monitored the market situation, and acted effectively to minimise the risk of disruptions to the supply chain. Given all of these efforts, there was no plant disruptions noted nor were there any effects on the JV’s supply chain activities and our teams continued to outperform the market challenges,” Shaibi said.
Going forward, he said, adaptation will be a key to ever-evolving market dynamics which will bring in increased flexibility and would better position us for the long-term outlook and maintain our market standing.
Doha
Qatar Aluminium Manufacturing Company (Qamco), a 50 percent joint venture partner in a successful smelter that produces premium high quality primary aluminium products in Qatar, on Thursday, announced that it has reported a net profit of QR12.3 million for the nine months of 2020, with earnings per share (EPS) of QR 0.002.
Qamco’s share of the revenue for the financial period amounted to QR1.6 billion, down by 14 percent, compared to nine months period of 2019.
Sales volume for the nine months period was marginally higher by 1 percent than last year, as Qamco’s joint venture (JV) swiftly shifted the production to standard ingots, whereas, the demand for premium aluminium products and alloys used by various industries declined.
Weakened demand on the back of economic slowdown and continued production surplus negatively affected the selling prices during 2020. Although, there were some recoveries in prices noted in the latter part of Q3-20, while the overall price sentiments remained negative throughout the nine months period of 2020.
Qamco JV’s average selling prices during the first nine months of 2020 fell by 16 percent, compared to the same period last year, and contributed QR292 million negatively to the net profits for the nine months period of 2020, as compared to the same period last year.
This was partially offset by the sales volumes, which positively contributed QR20 million to the nine-month net profits, as compared to last year.
Qamco’s share of JV’s EBITDA stood at QR439 million for the nine months period of 2020, down by 15 percent compared to the same period last year.
The EBITDA margins, however, remained resilient in the current turbulent market conditions and stood at 27.3 percent as compared to 27.5 percent for the first nine months of 2019.
The company’s JV was able to successfully contain its raw materials, energy, manpower and other direct costs by 12 percent for the first nine months of 2020 against the same period last year.
The overall decline in cost of goods sold contributed QR191 million positively to the net profits for the nine months period of 2020, as compared to the same period of 2019.
QAMCO’s share of deb t in the JV declined by 8 percent to reach QR2.2 billion as at September 30, 2020, compared to the balance as at December 31, 2019. The decline was mainly on account of principal repayment during the period.
During the first quarter of 2020, Qamco’s JV successfully refinanced its outstanding loan amounting to $1.3 billion for a period of five years. This refinancing deal is not only expected to bring free cash flows to the JV, but will also provide new avenues of flexibility to endure market volatilities, which in turn is expected to maximise shareholder value.
Qamco’s financial position continues to remain robust despite several macroeconomic headwinds, with the liquidity position at the end of September 30, 2020 reaching QR670 million in cash and bank balances including the proportionate share of cash and bank balances of the joint venture, after accounting for dividend payments for 2019.
During the period, Qamco’s JV generated positive share of operating cash flows of QR552 million, down by 43 percent compared to the first nine months of 19, with a share of free cash flows of QR 346 million, up by 34 percent compared to the same period of last year.
Commenting on the financial results, Qamco Chairman Abdulrahman Ahmad Al Shaibi said, “Despite the macroeconomic headwinds affecting the global markets, Qamco continued to rely on its core strengths, based on which Qamco’s JV managed to remain profitable in a market where global aluminium prices continued to show downwards trends amid unprecedented challenges posed to businesses globally due to COVID-19 pandemic.”
“In response to limit the spread of COVID-19 pandemic, our joint venture continued to implement measures to ensure safety and business continuity.
On the other hand, our sales and marketing partner, diligently monitored the market situation, and acted effectively to minimise the risk of disruptions to the supply chain. Given all of these efforts, there was no plant disruptions noted nor were there any effects on the JV’s supply chain activities and our teams continued to outperform the market challenges,” Shaibi said.
Going forward, he said, adaptation will be a key to ever-evolving market dynamics which will bring in increased flexibility and would better position us for the long-term outlook and maintain our market standing.
