The financial position of Qatar Aluminium Manufacturing Company (QAMCO) continues to remain robust despite several macroeconomic headwinds, said Chairman of the Board of Directors, QAMCO, Abdulrahman Ahmad Al Shaibi. He was addressing shareholders in a virtual Annual General Assembly, held yesterday.
The meeting approved the Board’s recommendation for a dividend payment of QR0.035 per share for 2020, representing 3.5 percent of the nominal share value.
“QAMCO’s financial position continued to remain robust despite several macroeconomic headwinds, with the liquidity position at the end of December 31, 2020 reaching QR740m in form of cash and bank balances, including proportionate share of cash and bank balances of the joint venture, after accounting for dividend payments for 2019,” said Abdulrahman Ahmad Al Shaibi.
“QAMCO’s competitive advantages, being one of the lowest-cost aluminium producer globally, together with our flexibility in operations and a lean cost-base, enhanced QAMCO’s response to the external challenges,” he added.
During the year, QAMCO’s Joint Venture (JV) generated positive share of operating cash flows of QR684m, with a share of free cash flows of QR226m.
The Chairman said that due to sluggish macro conditions, QAMCO’s JV continued to witness unprecedented pressure on aluminum product prices and a declining global trend in demand for aluminium products, which led us to a strategic shift in the product mix from premium value added products towards standard ingots during the year.
This proactive response to evolving market dynamics, supported QAMCO’s JV to witness sustainable sales volumes, while ensuring uninterrupted operations and commercial activity. Although, the shift in product mix from premium value added products to standard ingot, resulted in lowered premiums for the Company’s JV compared to the previous year, yet ensuring no interruption in our production plans and sales activities.
“However, there have been some signs of gradual recovery noted in the global macroeconomic climate, specifically in the latter part of 2020, with a rebound in the prices of aluminium products, owing to continuous unprecedented stimulus announcements and lifting of lockdowns in major markets along with optimism around vaccine roll-out,” he said.
“This led to QAMCO’s JV successfully shifting the product mix back to value added products from standard ingots in the fourth quarter of 2020, resulting in higher premiums and better margins for the fourth quarter of 2020,” he added.
QAMCO Board Member and Manager Privatized Companies Affairs Department, Qatar Petroleum, Mohammed Jaber Al Sulaiti, said that QAMCO’s joint venture continued to be one of the world’s lowest-cost aluminium smelters, with state-of-the-art production facilities, assured feedstock supply, along with an intense focus on HSE that makes the joint venture a leader among its regional peers. Moreover, the other JV partner, which is responsible for marketing of JV’s products, aided the joint venture in accessing strategically important markets, and supported the Company more competitively in comparison to other international players.
He said that QAMCO’s JV was able to successfully contain cost of goods sold, comprising of lowered raw materials and energy costs which together decreased by 15 percent and depreciation costs which declined by 1 percent, as compared to last year. The overall decline in cost of goods sold contributed QR255m positively to the net profits for the current year’s results as compared to 2019.
