Aluminium Bahrain B.S.C · BAHRAIN:ALBH
Aluminium Bahrain B.S.C — Q2 2023 Earnings Presentation
35 slides from Aluminium Bahrain B.S.C's earnings presentation, 2023
Slide 1: Investor Relations Presentation Q2 2023
INVESTOR RELATIONS PRESENTATION Q2 2023
Slide 2: Disclaimer
DISCLAIMER This document has been prepared and issued by and is the sole responsibility of Aluminium Bahrain B.S.C. (the “Company”). The document is being supplied to you solely for your information and for use at the Company’s presentation. No information made available to you in connection with th
Slide 3: Contents
CONTENTS 01 02 03 Industry Alba Q2 2023 Highlights Highlights Results 04 05 06 Industry Perspectives 2023 Alba Appendix in 2023 Priorities H1 2023 Page 3
Slide 4: Industry Highlights
01 INDUSTRY HIGHLIGHTS1 1 Industry Highlights are based on CRU Market Intel Page 4
Slide 5: Weak Demand due to Economic Uncertainty (+2% YoY)
Weak Demand due to Economic Uncertainty (+2% YoY) Q2 2023 has seen a continuation of economic uncertainty amidst bearish manufacturing activity and ongoing interest rate hikes by US Federal Reserve and European Central Bank (recent increase of 25 basis points) As Chinese Government has stepped up mo
Slide 6: World Market Supply Almost Flat (+1% YoY)
World Market Supply Almost Flat (+1% YoY) Despite recent smelter cuts in Yunnan province, China increased its production (+1% YoY) Europe is leading the world ex-China with its output cuts (-5% YoY) owing to high energy prices [curtailed capacity restarts are challenged in the world ex-China as ener
Slide 7: LME Price & Premiums
LME Price & Premiums LME Price remained under pressure as bearish market sentiment dominated the trading activity. LME-Cash averaged US$2,263/t in Q2 2023 -- down by 21% YoY [lowest: US$2,096.5/t on 30 Jun’23 and highest: US$2,410/t on 20 Apr’23] LME inventories at low levels at ~0.5 million MT (up
Slide 8: Alumina Price: 17% of LME Price
Alumina Price: 17% of LME Price [US$374/t] LME Price Trend (US$/t) 3,300 2,882 2,900 2,500 2,354 2,324 2,399 2,263 2,100 1,700 1,300 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Alumina Price Index Trend (% of LME) 19% 18% 17% 16% 16% 16% 15% 13% 10% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Page 8
Slide 9: Alba Highlights
02 ALBA HIGHLIGHTS1 1 Alba Highlights relate to Alba official news which have been made public during Q2 2023 Page 9
Slide 10: Safety in Numbers
Safety in Numbers # Total Injuries 70 # Recordable Injuries 59 60 # LTIs 49 50 40 34 32 30 20 9 10 10 0 2019 2020 2021 2022 Q1 2023 Q2 2023 12 12 11 9 3 2 0 1 0 1 0 1 4 Million Safe Working Hours w/o LTI on 12 July 2023 On 15 April 2023, Alba had an unfortunate LTI Page 10
Slide 11: Major Environment, Social and Governance (ESG) Highlights
Major Environment, Social and Governance (ESG) Highlights Alba Accelerates its Transformation to Industry 4.0 with the completion of online performance monitoring system for its Power Stations Alba commissioned three solar charging stations that will cater to Electric Vehicles (EVs) and Solar-Electr
Slide 12: ESG: A Journey, Not A Destination
ESG: A Journey, Not A Destination Decarbonisation Green Energy Circular Economy Employee Collaboration Transparency, Comms’ & Aluminium & Secondary Alu. Welfare & Partnership & Due Diligence 12 Mar’23 Net Zero 27 Apr’22 Secures BBK's Sustainability by 2060 Refinancing linked Financing for Solar Farm
Slide 13: Operational Highlights – Q2 2023
Operational Highlights – Q2 2023 Sales’ volume topped 392,258 metric tonnes (MT), up by 1% YoY while Production reached 405,628 MT, up by 2% YoY Value Added Sales averaged 70% of the total shipments [VAP: 272,944 MT in Q2’23 versus 270,301 MT in Q2’22] Natural Gas price remains at US$4/MMBTU until f
Slide 14: Financial Key Performance Indicators – Q2 & H1 2023
Financial Key Performance Indicators – Q2 & H1 2023 EBITDA – driven primarily by Free Cash Flow1 - impacted lower LME Price & Premiums by working capital changes H1: US$206 million down by 77% YoY H1: US$433 million Q2: US$80 million H1: US$211 million down by 59% YoY down by 84% YoY down by 56% YoY
Slide 15: Q2 2023 Results
03 Q2 2023 RESULTS Reference: Interim Condensed Consolidated Financial Statements for the Period Ended 30 June 2023 Page 15
Slide 16: Lower Metal Sales Owing to Drop in LME Price and Premiums
Aluminium Industry: Lower LME Prices & Premiums Amidst Weak Demand Lower Metal Sales Owing to Drop in LME Price and Premiums Metal Sales’ Bridge (US$M) – Q2 2023 vs. Q2 2022 1,500 284 1,200 12 72 13 900 1,384 by 21% YoY in LME Price by 40% YoY in Premiums 1,029 600 300 Metal Sales LME Product Mix Pr
Slide 17: Higher VAP & Liquid Metal with Lower Commodities
Aluminium Industry: Lower LME Prices & Premiums Amidst Weak Demand Higher VAP & Liquid Metal with Lower Commodities Sales by Product-Line Bridge (MT’000) Premium Above LME Trend US$ Per MT Q2 2023 vs. Q2 2022 450 650 400 3 18 17 450 -40% 350 542 300 388 392 250 327 250 50 200 Q2 2022 Q2 2023 Sales V
Slide 18: Higher Direct Cost Owing to Higher Throughput
Aluminium Industry: Lower LME Prices & Premiums Amidst Weak Demand Higher Direct Cost Owing to Higher Throughput & Partially Offset by Lower Alumina Prices Direct Cost Bridge (US$M) – Q2 2023 vs. Q2 2022 900 800 0 30 63 3 0 65 15 700 600 500 400 764 784 300 200 100 0 Direct Cost RM RM Energy Other A
Slide 19: EBITDA Bridge Gap Analysis – Q2 2023 vs. Q2 2022
Aluminium Industry: Lower LME Prices & Premiums Amidst Weak Demand EBITDA Bridge Gap Analysis – Q2 2023 vs. Q2 2022 Lower EBITDA Margin at 20% Owing to Lower Metal Sales EBITDA Bridge (US$M) – Q2 2023 vs. Q2 2022 700 EBITDA 40% 600 500 400 354 554 300 EBITDA 20% 0 24 200 20 204 100 EBITDA Metal Othe
Slide 20: Cash-Flow Bridge – Q1 2023 to Q2 2023
Aluminium Industry: Lower LME Prices & Premiums Amidst Weak Demand Cash-Flow Bridge – Q1 2023 to Q2 2023 Q1 2023 to Q2 2023 Cash-Flow Bridge (US$M) Free Cash Flow (US$M) 600 41 500 38 200 212 14 400 132 150 0 300 100 165 200 133 345 332 50 100 0 0 Cash CF WC General Block 4 Net Debt Payment Cash Q2
Slide 21: Key Financial Performance Q2 & H1 2023
Aluminium Industry: Lower LME Prices & Premiums Amidst Weak Demand Key Financial Performance Q2 & H1 2023 Financial Summary Q2 2023 Q2 2022 H1 2023 H1 2022 Average Cash LME (US$/MT) 2,263 2,882 2,331 3,075 Average Alumina Price (US$/MT) 374 465 364 448 Revenue (US$M) 1,029 1,384 2,013 2,594 EBITDA (
Slide 22: Industry Perspectives in 2023
04 INDUSTRY PERSPECTIVES1 IN 2023 1 Industry Perspectives are based on CRU Market Intel Page 22
Slide 23: Mixed Macroeconomic Outlook: Uncertain & Inflationary Market Sentiments
Mixed Macroeconomic Outlook: Uncertain & Inflationary Market Sentiments Market uncertainty will continue to cloud the Aluminium market and LME prices [no sign of demand recovery in Asia, Europe and US in the short-run) Carbon Border Adjustment Mechanism (CBAM) regulation would apply to aluminium pro
Slide 24: Raw Materials Price Trends (Al₂O₃, AlF3 and GPC)
Raw Materials Price Trends (Al₂O₃, AlF3 and GPC) Alumina spot prices to further soften owing to a correction in refining costs Aluminium Fluoride prices expected to range at the same levels owing to stable raw material prices Carbon markets (GPC, CPC & Anodes) expected to move into stability in the
Slide 25: 2023 Alba Priorities
05 2023 ALBA PRIORITIES1 1 Based on Alba 5-Year Strategic Initiatives Page 25
Slide 26: ESG Focus & Journey Towards Safety Excellence
ESG Focus & Journey Towards Safety Excellence Safety is a Journey, Not a Destination Continue our Safety journey by adhering to ‘Safety is our Operating License’ Further sustainable value across our value chain and in line with Bahrain’s objectives for ‘Net Zero Emissions’ by 2060 Increase Net Finis
Slide 27: Appendix (H1 2023)
06 APPENDIX (H1 2023) Reference: Interim Condensed Consolidated Financial Statements for the Period Ended 30 June 2023 Page 27
Slide 28: Lower Metal Sales – H1 2023 vs. H1 2022
Aluminium Industry: Lower LME Prices & Premiums Amidst Weak Demand Lower Metal Sales Owing to Drop in LME Price and Premiums Metal Sales’ Bridge (US$M) – H1 2023 vs. H1 2022 2,800 2,400 487 32 2,000 21 105 1,600 by 24% YoY 2,594 in LME Price 1,200 by 34% YoY in Premiums 2,013 800 400 0 Metal Sales L
Slide 29: Higher VAP & Liquid Metal with Lower Commodities (H1)
Aluminium Industry: Lower LME Prices & Premiums Amidst Weak Demand Higher VAP & Liquid Metal with Lower Commodities Sales by Product-Line Bridge (MT’000) Premium Above LME Trend US$ Per MT H1 2023 vs. H1 2022 800 25 3 550 19 500 450 600 400 -34% 350 300 743 752 487 250 400 200 319 150 100 50 200 H1
Slide 30: Higher Direct Cost – H1 2023 vs. H1 2022
Aluminium Industry: Lower LME Prices & Premiums Amidst Weak Demand Higher Direct Cost Owing to Higher Throughput & Partially Offset by Lower Alumina Prices Direct Cost Bridge (US$M) – H1 2023 vs. H1 2022 1,700 1,500 0 66 18 10 75 92 11 1,300 1,100 1,494 1,428 900 700 500 Direct Cost RM RM Energy Oth
Slide 31: EBITDA Bridge Gap Analysis – H1 2023 vs. H1 2022
Aluminium Industry: Lower LME Prices & Premiums Amidst Weak Demand EBITDA Bridge Gap Analysis – H1 2023 vs. H1 2022 Lower EBITDA Margin at 22% Owing to Lower Metal Sales EBITDA Bridge (US$M) – H1 2023 vs. H1 2022 EBITDA 40% 1,100 900 581 700 1,046 EBITDA 22% 500 0 35 67 300 433 100 EBITDA Metal Othe
Slide 32: Cash-Flow Bridge – FY 2022 to Q2 2023
Aluminium Industry: Lower LME Prices & Premiums Amidst Weak Demand Cash-Flow Bridge – FY 2022 to Q2 2023 FY 2022 to H1 2023 Cash-Flow Bridge (US$M) Free Cash Flow (US$M) 800 700 500 600 158 211 400 500 77 323 446 300 400 16 481 300 200 200 332 211 249 100 100 0 0 Cash CF WC General Block 4 Net Debt
Slide 33: Alba Shareholder's Structure
Alba Shareholder’s Structure Alba was converted into a Bahrain Public Joint Stock Company on 23 November 2010 Alba shares are listed on two exchanges: Ordinary Shares on Bahrain Bourse (BHB) and Global Depository Receipts (GDRs) on the London Stock Exchange – Alternative Investment Market Alba Ticke
Slide 34: Alba Share Price Performance [ALBH, BD]
Alba Share Price Performance [ALBH, BD] 1.60 1.40 1.20 1.090 1.086 1.00 0.80 0.60 0.40 0.20 0.00 Page 34
Slide 35: For more information, please contact us
For more information, please contact us on: IR@alba.com.bh Alba4World Alba4World user/Alba4World Alba4World Page 35
Aluminium Bahrain B.S.C. (Alba) — Q2 2023 Earnings Presentation on 6ix