Qamco reports nine-month net profit at QR521mn
Qatar Aluminum Manufacturing Company (Qamco), a 50% joint venture partner in Qatalum, reported net profit more than 43 times year-over-year to reach QR 521 million in first nine months (9 million) of 2021.
The company set the record for highest quarterly net profit on record of QR 233 million (in the third quarter) since its incorporation, capitalizing on high aluminum prices on renewed demand amid limited supply. Earnings per share were QR 0.093 as of September 30, 2021.
Aluminum prices continue to show strength on renewed global demand, sectors such as construction and autos are growing as global economies sequentially recover as the market reopens thanks to the success of the current vaccination campaign.
Aluminum being a key input for electric vehicles, wind turbines and solar power, has provided an additional layer of long-term demand.
The joint venture’s share of revenue increased 32% year-on-year to QR 2.13 billion and EBITDA (earnings before interest, taxes, depreciation and amortization) more than doubled to reach 918 million QR for 9M-21.
The improvement in Qamco’s financial results was largely attributed to an overall growth in average realized selling prices which increased 37% during 9M-21, positively contributing QR597mn to its bottom line.
Production remained stable, with volumes showing a marginal jump of 1% in 9M-21 compared to the previous year period. Sales volumes fell 3%, reflecting the timing of shipments.
The cost of selling the joint venture for 9M-21 was higher compared to the same period last year, mainly due to higher raw material costs; but partially offset by favorable inventory movements and cost optimization initiatives.
Finance charges for 9M-21 were down 38% due to lower interest rates and the failure to write off the unamortized portion of finance charges last year. The decrease in financial charges made a positive contribution to Qamco’s net profit at QR32mn.
Qamco’s financial position has remained strong with a liquidity position at the end of September 30, 2021 reaching QR 1.12 billion in the form of cash and bank balances (including the proportionate share of cash and bank balances of the joint venture).
During 9M-21, the joint venture generated an operating cash flow share of QR 740 million, with a free cash flow share of QR 576 million.
Stressing that it is continuing its efforts to manage controllable costs through an optimization program, Qamco said that up to 9M-21, the cost savings achieved were greater than expected, through higher throughput and increased expense. lower operating costs, which positively impacted the operating cost base of the joint venture. , while keeping it on the lower side of the cost curve relative to its global peers.