Alba to pay $200m dividend to shareholders

Aluminium Bahrain (Alba) today announced a dividend of $200 million to its shareholders at its annual general meeting (AGM) in Manama, the first AGM since being listed on the Bahrain and London stock exchanges in 2010.

The dividend amounted to around 53 per cent of the profits the company made in 2010. The smelter made a profit of $368 million against a loss of $220 million in 2009, which Alba chairman Mahmood Hashim Al Kooheji said was a striking turnaround made possible by efficiencies in operations.

“We’re confident the level of dividend will be maintained in the future and possibly increase,” said Al Kooheji.

“Alba is the only listed smelter in the world - as an individual company and not a group. What we’re announcing is a benchmark for the smelter industry globally,” he said. “This is a big achievement.”

Al Kooheji also said Alba’s shareholders were happy that production was not affected during the recent unrest in Bahrain, although there was a slight impact on shipping which was soon overcome.

“This is the strongest test anyone could go for and we succeeded. Our plans, our production and overall supplies were not affected. The effect on production was completely zero. There was not a reduction of even a single tonne,” he highlighted.

“Alba has come out much stronger. Overrall we’re happy we were able to maintain the status quo … we have a long-term vision and our utmost desire is to reward our shareholders.”

Alba was also placing strong emphasis on transparency, timely disclosure, equality and farsightedness, Al Kooheji said. “We managed our operations very professionally, both from the standpoints of actual operations and dealings with the workforce. We are united together. A lot of our employees are shareholders.”

Earlier, Alba chief executive Laurent Schmitt said the company was still in the process of studying plans for the proposed Potline 6. “We have done a pre-feasibility study for Line 6. We have to do first a study for the best options for energy sourcing and technologies. We expect to complete the studies by the end of this year and to be able to present the project by year’s end.”

For lines 4 and 5, Alba used the Pechiney technology. Schmitt said there were several technologies to consider and new-generation developments in existing ones. 

For Line 6 the company is looking at investing $2 billion for adding a capacity of 400,000 tonnes per year. As well as availability of new gas supplies, it was looking at the electrical option, either from the national grid or increasing the efficiency of its existing power generation facilities.

Aluminium consumption was set to grow further thanks to strong demand from the transportation, construction and packaging sectors and overall requirements from emerging countries, Schmitt said.

Alba produces more than 860,000 tonnes annually, its products including standard and T-ingots, extrusion billets, rolling slab, propertzi ingots and molten aluminium.

Schmitt said the company was currently not looking at taking stakes in other aluminium smelters or alumina suppliers.

Discussing sales and exports, Schmitt said Alba’s strategy was to sell value-added products such as extrusion billets, rolling slabs and foundry alloys and to generally optimise sales in its portfolio. The company was keen to develop long-term relationships with its customers and add a lot of technical value to its deals. Last year the company signed a multi-year agreement with Sapa Group in Europe to supply extrusion billets. Alba ships around 10 per cent of its production to Europe and would like this figure to rise.

Close to 50 per cent of Alba’s production was going to Bahrain’s downstream sector and the company expected that figure to be stable, Schmitt said. Another 20 per cent goes elsewhere in the region.

In other remarks, Schmitt said the company would strive to maintain continuous efficiency of operations. Its efforts had resulted in savings of $100 million last year against the 2009 performance. “This year we expect to save $170 million against the 2009 performance and by 2012 to deliver on a yearly basis savings of $250 million.”