Qatar- Qamco evaluates capex for risk minimisation, sustainable operations

(MENAFN- Gulf Times) Qatar Aluminium Manufacturing Company's (Qamco) joint venture (JV) is currently evaluating a wide spectrum of potential capital expenditure (capex) primarily associated with risk minimisation and ongoing sustainable operations.
In its annual report, which was distributed during Qamco's annual general meeting yesterday, the company said the JV's capex included a major turbine overhaul, a swing rectiformer project and pot relining, which is part of the planned cyclical programme, amounting to a total of QR116mn for the 13-month financial period.
'The company believes such projects are essential to maintaining its competitive position and to add value for shareholders. Planned projects include pot relining, turbine inspections, a baking furnace flue wall replacement, a swing rectiformer, a plan to enhance cybersecurity protocols and compliance with requirements set by Qatar's Ministry of Environment in relation to chemical warehouse, the report said.
Qamco is a 50% shareholder in Qatar Aluminium Limited (Qatalum), a JV operating an aluminium smelter in Qatar that produces primary aluminium products, said Qamco chairman Abdulrahman Ahmad al-Shaibi, who presided over the meeting, which approved the board of directors' proposed dividend distribution of QR55.8mn, equivalent to a payout of QR0.01 per share for 2019.
This is in addition to the interim dividend of QR111.6mn paid on May 5, 2019, equivalent to QR0.02 per share, which was distributed to shareholders during the year in relation to the six-month period ended December 31, 2018. The total dividends paid during the period amounted to QR167.4mn, representing a payout of 3% of the nominal value of the shares.
Al-Shaibi said global economic uncertainty throughout the year, with muted GDP growth, affected the aluminium industry. Most of the demand for aluminium was channelled, via excess inventory levels built up over the previous years, which was sold at lower market rates, he said.
'This was reinforced by ongoing trade conflicts, which caused a broad-based slowdown in global economies. Excess production capacity, as well as higher inventory levels, noted in many international markets, also played an important role in increasing pressure on commodity prices. All of these led, in turn, to an imbalance in the dynamics of supply and demand for aluminium products, ultimately affecting margins and profitability, al-Shaibi said.
Al-Shaibi said Qamco's financial performance and overall profitability were directly impacted by external factors beyond its control, including adverse macroeconomic conditions.
'A decline in net profits of 77% was noted for the financial period ended December 31, 2019, compared with the previous pro-forma financial period, to reach QR80mn, while earnings per share amounted to QR0.014, he said.
Speaking on Qamco's objectives and strategies, al-Shaibi said the company's JV developed its core objectives and strategies to ensure revenue enhancements by delivering safe, efficient, and reliable operations with consistent production levels.

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