The newly listed Qatar Aluminium Manufacturing Company (Qamco), which owns 50% interest in Qatalum, has put in a “strict” business plan with special emphasis on cost optimisation as part of its efforts to enhance efficiency.
The company will announce an interim dividend next month along with its 2019 first quarter results. The dividend to be declared will pertain to the six-month period from July 1, 2018 to December 31, 2018, in line with the company’s initial public offering prospectus and the founder’s (Qatar Petroleum) economic rights waiver.
It has obtained the necessary no objection from the Ministry of Commerce and Industry to amend the Company’s Articles of Association to have the first financial year to end on December 31, 2019.
“We have a big focus on our cost curves and so we have a very strict business plan,” Mohamed Jaber A al-Sulaiti, a Qamco board member, told reporters on the sidelines of its general assembly meeting wherein it was decided that first financial year will be December 31, 2019, and hence it will be disclosing 13 months financial statements at year end 2019.
Qatalum does not envisage any increase in production at present but its focus is now on enhancing efficiency, said al-Sulaiti, who is also QP’s manager, Privatised Company Affairs.
Qatalum’s operations have been ranked among the most efficient smelters in terms of cash cost in US dollar per metric tonne. It aims to continue to improve processes throughout the organisation to optimise costs.
The company benchmarks ‘cash cost’ to track its progress as it implements best practices. It utilises benchmarks to measure its performance and evaluate results. The Qatalum Improvement Programme (QIP) seeks to continuously optimise processes throughout the organisation resulting in reduced business costs.
Qamco is comfortable with its existing raw materials source, which is from the South American mines largely owned by Qatalum partner Norsk Hydro, according to al-Sulaiti.
“Qatalum don’t deal with the smaller players. We want a consistent supply chain so that our production is not interrupted,” he said.
Highlighting that its contracts for raw materials (alumina) usually cover medium terms of five to 10 years, he said Qatalum is currently under negotiations for the renewal.
He said aluminium prices has eased this year compared to 2018 when prices shot up mainly on account of the US imposing imports tariffs on Russian and Turkish aluminium.
Qamco’s IPO was oversubscribed 2.5 times, reflecting investors’ confidence in the country’s economy and its capital market. The country’s hydrocarbon bellwether, QP had offered 273.43mn shares of Qamco at QR10.1 (including the listing costs of 10 dirhams).