(MENAFN- The Peninsula) The Peninsula
Doha: Qatar Aluminum Manufacturing Company Q.P.S.C. (“QAMCO” or“the Company”; QE Ticker: QAMC), a 50 percent joint venture partner in Qatar Aluminum Company (Qatalum), today reported a record net profit of QR919m for the year ended 31 December 2022, with an earnings per share (EPS) of QR0.165. Commenting on the financial and operational performance for the year ended 31 December 2022, Mr. Abdulrahman Ahmad Al-Shaibi, Chairman of the Board of Directors, QAMCO, said:
“While macroeconomic context remained uneven, we continued our focus on operational excellence, cost optimization, operational flexibility, safety & sustainability, which resulted in an excellent set of financial results. Our firm belief and commitment to HSE has successfully positioned our JV to meet our health, environmental and social responsibility targets. Going forward, we will continue to leverage our core business strengths with an aim to create long-term shareholder value, considering all sustainability measures.”
The macroeconomic environment for the aluminium markets remained volatile throughout this year. Several factors impacted the commodity markets at the macro level, which cascaded to the supply-demand dynamics of aluminium and led to volatilities in prices. In the start of the year, demand for primary aluminium demonstrated strength across key aluminium intensive sectors, like automobiles (especially electric vehicles), construction, renewable energy and packaging industries. However, during second half of the year demand for aluminium was impacted by China's strict COVID related lockdowns, coupled with slowdown in the Chinese construction sector. In parallel, higher-than-expected inflation led to monetary tightening by most of the Central Banks, impacting industrial demand for most of the commodities.
Exorbitant energy prices in Europe has put pressure on most of the European smelters in maintaining capacities. Also, trade disengagements from Russia, amid geo-political tensions, is persistently creating uncertainty in the commodity markets with a growing risk of inventory builds.
On an overall basis, aluminium prices demonstrated essentially bullish trends during early parts of 2022, amid constructive demand and supply shortages.
Compared to 4Q-21, QAMCO's net profits for 4Q-22 declined by 63 percent, while share of JV's revenue declined by 3 percent. One of the key contributors towards this decline in bottom-line profitability was JV's higher operating cost which affected QAMCO's net earnings for 4Q-22 versus 4Q-21. Additionally, lower selling prices realized during 4Q-22 versus 4Q-21, which declined by 13 percent, affected QAMCO's net earnings for 4Q-22 versus 4Q-21.
On the other hand, sales volumes increased by 11 percent, mainly due to higher extrusion and standard ingot sales made during 4Q-22 in comparison to 4Q-21. CAPEX projects were conducted as planned and in line with the operational requirements. QAMCO's JV continue to reline 3rd generation of pots and replace fluewalls to ensure sustainable operations, while minimizing the risk for disruption in production. During the year, QAMCO JV incurred QR229m (QAMCO's share) on account of CAPEX outlays, which included routine operations, such as pot relining and other maintenance pertaining to power plant and anode plant. The CAPEX programs will support JV's drive for operational efficiency, while reducing carbon footprints.
After reviewing current year's robust financial performance, with the present and forecasted liquidity position, and considering current and future macroeconomic conditions, business outlook, CAPEX, long term loan repayment plan of the Company, the Board of Directors proposed a total annual dividend distribution of QR502m for the year ended 31 December 2022, representing a payout ratio of 55 percent of current year's net earnings. A dividend of QR 0.09 per share represent 9 percent of par value resulting in a dividend yield of 5.9 percent on the closing share price as of 31 December 2022.
QAMCO will host an IR earnings call with investors to discuss its results for the financial year 2022, business outlook and other matters, on Monday, 6th February 2022 at 1:30 p.m. Doha time. The IR presentation that accompanies the conference call will be posted on the 'financial information' page within the Investor Relations section at QAMCO's website.