ALBA’S top executives have cited the smelter’s competitive edge and resilient business model in comments on the Q3 financial performance that saw it achieve a net income of $35 million driven by lower London Metal Exchange (LME) prices, higher gas prices and unrealised derivative losses.

The company reported that sales for the quarter were $457 million and free cash flow was $37 million impacted by lower LME and higher gas prices and partially offset by working capital management.

“Alba’s resilient business model underpins the company’s healthy performance amid the downtrend of LME prices. This has enabled the company to maintain its position as a flagship for Bahrain’s economy and a key driver to the growth of the kingdom’s aluminium sector,” said Alba chairman Mahmood Hashim Al Kooheji who thanked the executive management team for demonstrating leadership and the workforce for the support extended.

CEO Tim Murray commented: Despite the low LME levels, Alba was able to still generate a free cash flow while the majority of the world’s smelters are operating cash negative. The company’s focus on strengthening its competitive edge through improving production processes across the plant has seen the production on pace to surpass the 2011 record.”

Alba said in a statement its priorities would be acceleration of the AlbaSafeWay programme, launching of a bankable feasibility study for Line 6 by year’s end and finalisation of a long-term contract to secure gas and power.

Earlier this year, BNP Paribas was appointed as a financial advisor and rating advisor to the company for identifying and assessing financing options in connection with the Line 6 project. The company’s last major expansion project took place in 2005 when it added a fifth potline to its smelter. This expansion required a financing of $1.7 billion. The financing required for the completion of the new potline is estimated to be around $2.5 billion.

AlbaSafeWay, launched in 2011 in partnership with DuPont Sustainable Solutions, aims for zero incidents involving physical harm.

Q3 highlights of the global aluminium industry were marked by a 3.9 per cent increase in world consumption while production was down by 2.4 per cent, a tight demand on the back of strong North American, Mena and Asian demand and an LME cash average of $1,922 per metric tonne versus $2,400 per metric tonne in Q3 2011.

Significant developments during the quarter included the appointment of Murray as CEO, the settlement of the Rico case with Alcoa worth $447 million consisting of an $85 million cash component and $362 million from a long-term alumina sales agreement and increased production capacity in Potline 5 through the successful implementation of the 1,600-mm-long anode.