Aluminium Bahrain Q2 net income tumbles 45.4%

Aluminium Bahrain (Alba), owner of one of the world’s largest aluminium smelters, reported a 45.4 per cent fall in second-quarter net profit on Sunday.

Alba’s net income for the three months to the end of June was BD 16.28m ($43.2m), compared with a profit of BD 29.8m in the prior-year period.

The company did not provide a reason for the decline in its statement, but Alba had reported weak earnings in the previous three quarters because of a collapse in global aluminium prices.

From a peak just short of $2,000 per tonne in May 2015, London Metal Exchange aluminium slipped below $1,450 in November last year. Since then it has recovered only slightly, to $1,611 at the end of last week.

The firm said its board had proposed not to offer a cash or share dividend for the period. This compares with BD 0.0055 per share in the corresponding period of 2015.

Alba had cut its full-year dividend for 2015, with chief executive Tim Murray saying in February that the reduced payment would help free up cash for its Line 6 expansion project.

The company aims to become the world’s largest single aluminium smelter complex, boosting its annual output by 540,000 tonnes to 1.5 million tonnes by adding the sixth “potline”, used to produce the metal from raw materials such as bauxite.

Production at the facility is expected to start in early 2019 and Alba is raising around $3bn to help finance the scheme, through a mixture of loans from banks and export credit agencies and an international bond or sukuk issue.

Alba has approached banks for a $750m loan towards the Line 6 financing, sources told Reuters in June.