Bahrain's Alba posts H1 profit hike of 46% despite global trade war
Rising aluminium demand in Saudi Arabia and China fuelled Alba's year-on-year profit growth and offset fears of a trade war that it said are "unnerving the market"
Saudi Arabian and Chinese demand for metal offset rising prices and a looming trade war to help Aluminium Bahrain (Alba) record a 46% profit rise for the first half of 2018.
Alba notched up double-digit profit growth for both H1 and Q2 2018 thanks to major infrastructure spending in Saudi Arabia and China, which helped cool fears of a trade war that Bahrain's smelting giant said was "unnerving the market".
Half-year net profit of $67.5m (BHD63m) surged by 46% year-on-year when compared to the $115m (BD43.3m) the company posted in 2017.
Sales in the first half of the year went up by more than a quarter, rising from $983.3m (BHD369.7m) in H1 2017 to $1.2bn (BHD465.2m) in H1 2018.
Higher sales volume fuelled Alba's quarterly numbers, as net profit surged from $46.9m (BHD17.7m) to $77.4m (BD29.1m) – a 65% year-on-year increase.
Greater production efficiency, coupled with "healthy" international demand, helped year-on-year sales rise by more than a third, with Alba generating $648.9m (BHD 244m) in revenue for Q2 2018.
Meanwhile, the expansion of Alba's Line 6 smelter now stands at 61%. The company said it was racing ahead to finish the project and planned to award remaining packages for the project in the second half of the year.
The Line 6 project is one of the biggest brownfield expansions in Bahrain, and will bring Alba’s total production capacity to 1.5 million metric tonnes per year, creating one of the world’s largest single-site aluminium smelters.
Alba’s chairman, Shaikh Daij Bin Salman Bin Daij Al Khalifa, said the firm remained "fully committed to achieving our targets on the Line 6 expansion project".
Tim Murray, Alba's chief executive officer, added that safety remained the company's main priority as it moved into "the difficult summer months" when construction and smelting work becomes hard due to the heat.
Due to the "many headwinds" in the market, such as the "impact of higher alumina prices", the business will also focus on its cost-cutting initiative called Project Titan, Murray said.
Plans to further increase production "to offset the market challenges" are also in the pipeline, he added.