(MENAFN- The Peninsula) The Peninsula
Doha, Qatar: Qatar Aluminum manufacturing Company (QAMCO) a 50% joint venture partner in Qatar Aluminum Company (Qatalum), yesterday reported a net profit of QR240m for the six-month period ended June 30, 2023, as compared to QR611m for the same period of last year, with an earnings per share (EPS) of QR0.043 versus QR0.110 for 1H-22.
Share of JV's revenue declined by 25% to reach QR1,585m for the current period, as compared to QR 2,106 million for 1H-22. EBITDA declined by 44% and reached QR498m in comparison to QR883m for the same period of last year. While EBITDA margin for 1H-23 remained at 31% compared to 42% for 1H-22.
QAMCO's financial results for the current period versus same period of last year, were largely attributed to an overall decline in average realized selling prices and slightly lower sales volume.
Average realized selling price witnessed a decline of 24% during 1H-23 versus 1H-22 to reach USD 2,743 /MT amid macroeconomic challenges and impacted QR496m to the net profit for six-month period ended 30 June 2023 versus the same period of last year.
Production levels slightly inched higher with an increase of 2% was noted in the production volumes for the current period versus 1H-22. However, sales volumes declined by 1% versus 1H-22, due to relatively lower sales of extrusion ingots versus last year.
Decline in sales volumes impacted QR25m to the net profit for six-month period ended 30 June 2023 versus 1H-22.
Cost of goods sold for the current six-month period declined mainly on account of lower raw material costs coupled with higher closing inventory, as production volumes remained higher than sales volumes, versus the same period of last year.
On overall basis, the decline in cost of goods sold contributed QR106m positively to the net profits for the six-month period ended 30 June 2023 versus same period of last year.
In comparison to previous quarter, QAMCO's net profits for 2Q-23 inclined by 58%. Key reason behind this positive movement in profitability was mainly due to higher sales volumes coupled with slightly improved selling prices realized during 2Q-23 versus 1Q-23, which inclined by 13% and 3% respectively.
Improvement in sales volumes was mainly attributed to timing of shipments on sequential basis. This increase in sales volumes contributed QR96m positively to the bottom-line profitability of 2Q-2023 versus 1Q-23.
Selling prices on other hand inched slightly upwards versus 1Q-23, in line with slight recovery in global aluminum prices and contributed QR17m positively to the net earnings of 2Q-23 sequentially.
In line with higher sales volumes, cost of goods sold is higher for 2Q-2023 versus 1Q-23 by QR63m with direct positive contribution to uplift EBITDA by QR52m for current quarter.
Compared to 2Q-22, QAMCO profitability decrease by 60% mainly on account of lowered average realized selling price amid macroeconomic challenges witnessed by aluminum market during 2Q-23. On the other hand, sales volume inched by 2% contributing positively to the overall bottom-line profitability.
QAMCO's financial position continued to remain robust with the liquidity position at the end of 30 June 2023 reaching QR1.8bn in form of cash and bank balances (including proportionate share of cash and bank balances of the joint venture).
During the period, QAMCO's JV generated share of operating cash flows of QR178m, with a negative share of free cash flows of QR101m mainly due to partial loan repayment.
QAMCO's JV continue to maintain high efficiency and cost competitiveness in terms of its production and operations. Health and safety measures continue to remain a priority to ensure reliability of assets, while achieving operational excellence.
CAPEX projects were conducted as planned and in line with operational and reliability requirements.
QAMCO will host an IR earnings call with investors to discuss its results for 1H-23, on Wednesday, August 16, 2023 at 1:30 pm 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.