Alba Quarterly Profit Falls 72.5% as War Shutdowns Cut Aluminium Output

The result shows that higher metal prices can no longer make up for lost output at one of the world's largest single-site smelters. London Metal Exchange aluminium prices were about 23 per cent higher in the third quarter than a year earlier, but Alba had too little metal to sell. Earnings per share fell to 13 fils from 48 fils, the company said in its results, published on November 10.

Net finished production fell 41 per cent to 709,395 tonnes in the first nine months, which Alba attributed mainly to the controlled shutdown of reduction lines 1, 2 and 3. Sales volume over the same period fell 33 per cent to 800,792 tonnes. Value-added products made up 67 per cent of shipments, with sales of those products down 41 per cent to 532,591 tonnes. Alba did not report sales volume for the third quarter alone; Reuters estimated that it fell by more than a quarter.

Chief executive Ali Al Baqali said the company's focus is getting the remaining capacity back. "Our immediate priority remains the safe full ramp-up of Reduction Line 4," he said, adding that Alba is also working to protect smelter stability and build supply-chain resilience.

The smelter has been hit directly by the war. In March, Alba said an Iranian attack struck its plant, and it declared force majeure as the closure of the Strait of Hormuz stopped it shipping metal to customers and disrupted deliveries of alumina, its main raw material.

For the year so far, the price rally still outweighs the production losses. Nine-month profit rose 44.3 per cent to BD158.7 million ($422 million) from BD110 million, and earnings per share rose to 112 fils from 78 fils. Total comprehensive income for the period rose 51.8 per cent to BD161.1 million. Most of that came in the first half, when Alba earned BD140.2 million.

Alba is also trying to expand in Europe. Chairman Khalid Al Rumaihi said that "the acquisition of Aluminium Dunkerque continues to progress through the regulatory approval process." The French plant is Europe's largest primary aluminium smelter, and the deal still needs its remaining approvals before it can close.

Bahrain's sovereign wealth fund, Bahrain Mumtalakat Holding Company, owns 69.38 per cent of Alba, and Saudi Arabian Mining Company (Maaden) owns 20.62 per cent. The shares, which trade in Manama, closed at BHD0.73 on Tuesday, down more than 27 per cent this year.

The timing of the line 4 ramp-up, and any plan to restart the three idled lines, will decide how much of the price rally Alba can capture in the fourth quarter.