3rd Quarter Results

Media Release - Monday 26 October 2020

Alba Discloses its Financial Results for the Third Quarter and Nine-Months of 2020

Q3 & Nine-Months of 2020 Financial Performance

Aluminium Bahrain B.S.C. (Alba) (Ticker Code: ALBH), the world's largest aluminium smelter w/o China, has reported a Loss of BD11.6 million (US$31 million) for the third quarter of 2020, up by 209% Year-over-Year (YoY) versus a Profit of BD10.7 million (US$28.4 million) for the same period in 2019. The Company reported Basic and Diluted Loss per Share for the third quarter of 2020 of fils 8 versus Basic and Diluted Earnings per Share of fils 8 for the same period in 2019. The Total Comprehensive Loss for Q3 2020 stood at BD11.7 million (US$31.1 million) versus Total Comprehensive Profit for the third quarter of 2019 of BD10.7 million (US$28.4 million) - up by 209% YoY. Gross Profit for the third quarter of 2020 was BD25.7 million (US$68.3 million) versus BD29.2 million (US$77.6 million) in Q3 2019- down by 12% YoY.

With regards to the nine-months of 2020, Alba has reported a Loss of BD22.3 million (US$59.2 million), up by 164% YoY, versus a Loss of BD8.4 million (US$22.4 million) for the same period in 2019. For the nine-months of 2020, Alba reported Basic and Diluted Loss per Share of fils 16 versus Basic and Diluted Loss per Share of fils 6 for the same period in 2019. Alba's Total Comprehensive Loss for Nine-Months of 2020 was BD31.5 million (US$83.8 million), up by 273% YoY, compared to a Total Comprehensive Loss of BD8.4 million (US$22.4 million) for the nine-months of 2019. Gross Profit for the nine months of 2020 was BD80.9 million (US$215.1 million) versus BD45.4 million (US$120.9 million) in nine-months of 2019 - up by 78% YoY.  

With regards to the Revenue from Contracts with Customers in the third quarter of 2020, Alba generated                BD262.7 million (US$698.6 million) versus BD287.1 million (US$763.6 million) in Q3 2019 - down by 8.5% YoY. For the Nine-Months of 2020, Total Revenue from Contracts with Customers reached BD782.6 million (US$2,081.5 million), up by 6% YoY, compared to BD735.7 million (US$1,956.7 million) for the same period in 2019.

Total Equity as at 30 September 2020 stood at BD1,046.2 million (US$ 2,782.4 million), down by 3%, versus BD1,078.6 million (US$2,868.6 million) as at 31 December 2019. Alba's Total Assets as at 30 September 2020 stood at BD2,382.3 million (US$6,335.9 million) versus BD2,420.2 million (US$6,436.8 million) as at 31 December 2019 - down by 1.6%.

Alba's top-line was driven in the third quarter of 2020 by higher metal Sales' volume thanks to Line 6 and partially offset by lower LME price [down by 3% Year-over-Year (US$ 1,706/t in Q3 2020 versus US$ 1,761/t in Q3 2019)] while the bottom-line was impacted by higher depreciation, financial charges and foreign exchange losses.

Q3 2020 Industry Highlights

§ The Global recovery lost its momentum as markets reacted differently with the easing of lockdown restrictions. The political and economic response to COVID-19 has also raised importance on ESG issues and given voice for stimulus packages to be green.

o  World Consumption down by 4% Year-over-Year.

o  COVID-19 outbreak continues to take its toll on Aluminium demand in major markets -- World ex-China has seen a decline in Aluminium consumption [a drop of 12% YoY].

o  Challenges relating to pandemic, impact of failure in Brexit negotiations, US elections and US-China trade war continue to weigh on business sentiment in Europe -> leading to a contraction in Aluminium demand of 13% YoY.

o  Recovery in Aluminium demand gathers pace in China with 3% YoY increase thanks to the government's stimulus packages [rebound in construction and auto sectors].

§ Global Production witnessed a modest growth of 2% YoY. Primary Aluminium production in MENA down by 3% YoY [owing to supply cuts in UAE of c.6% YoY]. Manufacturing activity in US continues with supply in North America up by 4% YoY. China's output grew by 5% YoY - boosted by start-up of new projects. This has led the world market to be in surplus with China (+611Kt) and (+851Kt) without China.

§ LME inventories at ~1.45 million MT as of September-end (up by 56% YoY). LME-Cash averaged US$1,706/t (down by 3% YoY) and the physical premium prices were on roller coaster ride.

Alba Safety Highlights amidst COVID-19

§ Alba launches its first virtual Summer Safety Campaign 'Our Safety is in Our Hands' in July 2020

§ Alba achieved 24.5 Million Safe Working-Hours w/o LTI on 02 August 2020. On 03 August 2020, Alba had an unfortunate LTI.

§ Ongoing liaison with the National Taskforce for combatting COVID-19 to ensure People's Safety (Employees and Contractors' Workers).

§ Remote work from home continues for soft departments (men & women).

§ Restricting travels, embracing social distancing and conducting virtual/e-meetings with all Management levels and visitors.

Q3 2020 Alba Highlights

§ Alba hosts virtual 'Market Update' sessions for its customers in partnership with CRU.

§ Alba -- a recipient of 2 major awards from Middle East Investor Relations Association (MEIRA).

§ MoU inked between Alba and University of Bahrain to enhance scientific and research cooperation.

§ Sales' volume topped 393,177 metric tonnes (MT) - up by 5% YoY while Production reached 385,638 MT (almost flat).

§ Value-Added Sales averaged 48% of total shipments.

§ Spent Pot Lining (SPL) Plant overall progress exceeded 40%.

2020 Alba Priorities

§ Strong focus on 'Safety Globe' Initiative & keep Alba's intrinsic assets (Employees & Contractors) safe amidst novel COVID-19.

§ To achieve 2020 Production Target of 1,540,000 MT.

§ Maintain Project Titan - Phase IV Savings [Projected Savings of US$ 100 Million by 2020-end].

§ Screen for upstream opportunities to secure c. 1/3 of Alumina requirements.

§ Capitalise on Aluminium Stewardship Initiative (ASI) and Ecovadis Certifications to penetrate new markets as well as segments for foundry and slabs.

§ Establish a Branch in Singapore.

§ Complete SPL Treatment Plant and Port Upgrade as per timeline.

§ Launch 2021 Objectives in Annual CEO Majlis.

Commenting on Alba's financial performance for the third quarter and 9-months of 2020, the Chairman of Alba's Board of Directors, Shaikh Daij Bin Salman Bin Daij Al Khalifa stated:

"We are all in this together and COVID-19 showed us that nothing is more important than our Safety. At Alba, Safety of our people and contractors' employees, is and will remain our number one priority.

Like all businesses, our performance has been relatively dampened due to COVID-19 impacts and despite our operational resilience."

Adding further, Alba's Chief Executive Officer, Ali Al Baqali said:

"We continue to navigate through these unprecedented times by focusing on what we control best: Safety of our People, Efficient Operations and Lean Cost Structure.

We also remain optimistic that with the agility of our people and strategic capabilities, we will get back on track and stronger than before."

Alba Management will hold a conference call on Tuesday 27 October 2020 to discuss Alba's financial and operational performance for Q3 2020 as well as outline the Company's priorities for the remainder of this year.

ENDS

About Aluminium Bahrain B.S.C. (Alba)

[Ticker: ALBH]

Alba is the world's largest aluminium smelter ex-China with a production of more than 1.35 million metric tonnes per annum (mtpa) (2019). With dual listing on Bahrain Bourse and London Stock Exchange, the Company's shareholders are Bahrain Mumtalakat Holding Company B.S.C. © (69.38%), SABIC Industrial Investment Company (SIIC) (20.62%) and General Public (10%).

In addition to molten metal, our diverse Value-Added Product (VAP) portfolio includes Foundry grade re-melt products (T-Ingots, Standard Ingots and Properzi Bars), Rolling Ingots (Slabs), Extrusion Ingots (Billets) and Unalloyed P1020 re-melt products. Around 75% of our products - from customised alloys to a variety of surface finishes -- are exported to more than 150 global customers through our sales offices in Europe and Asia and subsidiary office in the U.S.

Alba Campus comprises six Reduction Lines, five Power Stations, three Casthouses, four Carbon Plants along with other ancillary facilities. In addition to primary aluminium production, we also produce 530,000 mtpa of high-quality calcined petroleum coke at our own dedicated Coke Calcining Plant. Alba also yields 9.5 million cubic metres of potable water per annum from its dedicated seawater desalination plant.

Alba has carved an enviable reputation in Safety, Environment and Health, Sustainability and Quality Management. It is one of the few smelters in the world to have achieved Zero Lost Time Injuries (LTI) in 2019. Alba, in 2020, was recognized with five categories of National Safety Council awards, International Safety Award with Merit from British Safety Council and Gold Medal Health and Safety Award from the Royal Society for the Prevention of Accidents (RoSPA).

Alba brings value to its customers with the many globally recognised certifications such as ISO 9001, ISO 45001, ISO 14001 and ISO 27001 certifications. Moreover, the Company attained the significant Automotive Quality Management System - IATF 16949 in 2018 and, Bronze Medal by EcoVadis and Aluminium Stewardship Initiative (ASI) Performance Certification in 2020.

Alba is committed to fostering greater sustainability across all our operations. In line with its CSR initiatives, Alba set-up the Region's first-of-its-kind Spent Pot Lining (SPL) Treatment Plant in cooperation with Bahrain's Supreme Council for Environment in 2019 to create a sustainable solution for the treatment of SPL with zero-waste. In 2020, Alba inaugurated its Fish Farm Project in collaboration with the Bahrain National Guard Consumer Association, thus boosting the Kingdom's aquaculture and enriching the biodiversity around Alba's operations.

Starting out in 1971 as a 120,000 mtpa smelter, Alba has continually delivered value to its customers, shareholders, and stakeholders. As we mark the Golden Jubilee of operations in 2021, we aspire to be more productive, innovative, and sustainable.

For more information, please visit us on www.albasmelter.com

Alba External Grievance Mechanism

Alba's External Grievance Mechanism receives and facilitates the resolution of any affected communities' concerns and grievances about Alba's Environment and Social (E&S) performance. External grievances about Alba's E&S performance can be logged via the Alba Integrity Line - an independently operated confidential reporting hotline in multiple languages - via a toll-free phone system or via the intranet 24 hours a day,

Alba's External Grievance Mechanism is in line with Performance Standards of the International Finance Corporation (IFC), a World Bank affiliated lending organisation.

Alba Response to COVID-19 Pandemic

As one of Bahrain's leading industrial companies, Alba's response strategy to COVID-19 was initiated as early as January 2020 and was based on the guidelines of Bahrain National Taskforce for Combating Coronavirus (COVID-19).

Alba's Executive team adapted an interactive approach from creating personal video messages, visiting shop-floor areas and engaging in virtual daily briefings with its Healthcare Centre team. Alba Management announced work-from-home and reduced working-hours where applicable especially for the female staff, and actioned plant-wide temperature checks for all shifts; social distancing protocols in offices, shop-floor areas and transport vehicles; frequent sanitization of all operational and non-operational areas; distribution of protective kits; installation of hand sanitizer dispensers across the Company and posted multilingual posters in various areas.

Despite COVID-19 outbreak, Alba continued to maintain stable operations thanks to its Business Continuity Plan and Emergency Preparedness Plan and sent-out Letter of Assurance on Safe operations at Alba to all its stakeholders (customers, suppliers and regulators) early in the year.

At Alba, the Safety of our people - employees and contractors - always comes First. Whilst we continue to follow COVID-19 measures at all times, we remain focused on Safety, Efficient Operations and Lean Cost Structure.

For further details, please contact:

Eline Hilal

Director, Investor Relations, Insurance & Corporate Secretary

Investor Relations Department

Tel:         (973) 1783 5100

E-mail:    eline.hilal@alba.com.bh

Website: www.albasmelter.com

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