Aluminium Bahrain B.S.C. (ALBH) Earnings Call Transcript & Summary

Good afternoon, everyone. On behalf of Alba's CEO and CFO, we would like to welcome you to our results call. Before we start, I would like to thank again Anoop for being with us for the last couple of webcasts. He's representing SICO and on behalf of the management, Anoop, we thank SICO. This webcast will be co-chaired by Alba's CEO and CFO, along with myself, Eline. Without further ado, let's begin the presentation. I will be covering Sections 1 and 2, focusing on market fundamentals as well as Alba's highlights for this quarter. Following that, our CFO, will take a deep dive into Alba's Q1 2025 financial results. And finally, our CEO will provide us his insights into the industry perspectives for the remainder of 2025, along with Alba's key priorities for this year. Starting now with Slide 5, I want to walk you through the dynamics shaping the aluminum market and how we are navigating the current landscape to deliver value to our stakeholders. We began 2025 with a sense of optimism, witnessing a global economy that was showing encouraging signs of growth and a welcome stabilization in inflation across major economies worldwide. This positive momentum naturally fueled demand across various sectors, but this promising start was met with a significant headwind, the tariffs. These trade measures injected a considerable degree of uncertainty into the market, creating ripples that directly impacted both LNG benchmark prices as well as the railroad cost through physical premiums. While the possibility of deescalating trade tensions offered a potential pathway to relief, the future impact of these tariffs remain a key factor we are closely monitoring as a management and strategically planning for. Moving into the performance across key regions, I will start with China. We observed a proactive shift in economic strategy. Recognizing the global uncertainties, policymakers have announced measures aimed at bolstering domestic consumption. Encouragingly, we saw the property sector stabilize, marked by improved new home sales and a reduction in inventory, a positive sign for downstream demand. This internal focus in China translated into tangible results with aluminum consumption showing a robust 2% year-over-year increase, highlighting the strength of their internal demand. Moving to the Middle East. We experienced a solid 3% year-over-year growth. This was specifically propelled by strong consumption in Saudi Arabia, which saw a notable 4% increase year-over-year and a combined healthy growth of 3% in Bahrain as well as the United Arab Emirates. This robust regional performance underscores the ongoing development and investment within our GCC economy. As for Europe, despite a slight easing of inflation in the early months, overall consumption remained flat. This suggested a market that while not experiencing significant growth is also proving resilient in the face of global economic currents. Finally, in North America, the economy demonstrated some strength in the first quarter, primarily driven by a robust consumer spending and a recovering housing market. This domestic performance contributed to a 1% year-over-year increase in demand. In conclusion, on this slide, we note that while the global economy presented a positive initial trajectory, the influence of tariffs has introduced complexity and uncertainty. Let us turn now our attention to the supply dynamics. In the first quarter, we observed a globally constrained aluminum supply environment, which has seen a plus 1% year-over-year increase. While some smelters were ramping up production, these increases were largely offset by the impact of closures from the end of the previous year. This delicate balance underscores the tightness we are seeing in some of the regions. Looking specifically in China, the engine of global aluminum production, we saw a modest supply increase of just 1% year-over-year. What's particularly noteworthy over here is that China is nearing its self-imposed production capacity trailing at 45 million metric tons. This has effectively signaled that substantial net supply growth from China is becoming increasingly unlikely in the foreseeable future. And this capacity constraint would be having significant implications for the global market dynamics. In the Middle East, we experienced a slight contraction in supply, down by 1% year-over-year. In Europe, on the other hand, we saw a marginal increase in production of 1% year-over-year. This slight uptick was primarily driven by the gradual return to full operation of German smelters, highlighting the impact of regional factors on supply availability. North America presented a different scenario with production contracting by 3% year-over-year. The primary driver here was a 2% decline in output from the Canadian smelters a key producing nation in the region. This contraction further contributed to the overall supply tightness outside China. And now moving into the market balance. It's offering today a compelling insight. When we look at the global market, including China, we see a surplus of 253,000 metric tons. However, and at this critical point, when we exclude China from the equation, the global market reveals a deficit of 265,000 metric tons. This divergence underscores the unique position of China in the global aluminum market. While their production growth is slowing and nearing capacity as stated earlier in the slide, their consumption is still significant and the surplus we see globally when China is included is largely absorbed within their domestic market. And now let's delve into Slide #7 for the crucial aspects of pricing and inventory, directly impacting our financial performance and Alba's market positioning. In the first quarter of this year, the LME price for aluminum averaged a robust $2,629 per metric ton, marking a significant 20% increase compared to the same period last year. This upward trend reflects the underlying strength in the market. Fundamentally, LME price were supported by low global inventory levels and modest supply growth. However, towards the end of the quarter, we have seen some downward pressure in the LME price due to evolving trade policies as we are all aware, a factor we continue to monitor closely. Adding to this picture of internal market, LME inventories saw a substantial year-over-year decrease of 17%, setting at 460,000 metric tons. This reduction in available market underscores the supply constraints we discussed earlier and naturally puts upward pressure on LME prices. Beyond the base LME prices, regional price premiums tell an even more compelling story. In the U.S., following the implementation of tariffs, we witnessed a dramatic 77% year-over-year surge in premiums. This clearly illustrates the direct impact of trade policy on the cost of aluminum for end users in that region. On the same note, in Europe, the DDP Rotterdam premium increased by 17% year-over-year. And in Asia, MJP saw a significant jump of 153% year-over-year. These substantial increases in regional premiums were primarily driven by a combination of depleted inventory levels in those regions as well as prevailing geopolitical factors, highlighting the localized supply-demand imbalances. Moving now to Slide 8. We're showing you the LME price trend over the last few quarters. As stated earlier, LME price jumped by 20% year-over-year, while alumina price index settled at 28% of the LME price corresponding to $744 per tonne. Moving now to a new section for Alba's Q1 2025 highlights. We begin with Slide #10 to talk more about our safety performance. Today, we sit proud to have achieved an unparalleled safety performance with 0 LTI and 0 total injuries. This has enabled us to hit just a couple of days ago, a historical milestone of 35 million safe working hours without LTI, a first in the aluminum industry worldwide. Moving now into the company's achievement for the quarter. I will be selectively reading some of the important events, and I will leave the rest for you to read at your leisure. From a safety perspective, I would like to focus that we have been the recipient of 6 National Safety Council Award from the British Safety Council in 2025. We've also been honored with the prestigious RoSPA Life President Award for Unparalleled Safety Excellence. We have also launched a couple of weeks ago a mini safety campaign during the holy month of Ramadan and it's titled Be an Albawee in Ramadan. In regards -- with regards to empowering talent, 56 national employees have completed their training and development program Al Jisr. We have also promoted 3 Bahraini talent to key managerial positions. And we also celebrated the promotion of more than 2,050 Bahraini employees over the past 5 years, setting the Bahrainisation rate at 87%. From sustainability, environmental stewardship and community front, we have embarked on a pilot program for the electric battery-powered aluminum fluoride feeding vehicle in our potlines. We're also very proud to have joined the Sea Cargo Charter as its newest signatory, reinforcing our sustainable shipping commitments. And last, we have also joined Tamkeen's Open Innovation Program to obtain innovative solutions from Bahraini start-ups and small medium enterprises, the first company in Bahrain to have joined this program. Turning now into Slide 13. Basically, this is the same slide that we have -- this is the same slide, which we have provided you with in the presentation for the full year results of 2024, except for 2 small updates in the time line. In -- with regards to the solar farm, it's going to be soon commissioned, while Block 4 of Power Station 5 is now fully operational since end of December 2024. Moving now our attention to the company's performance on Slide 14. I'm pleased to report our resilience and ability to navigate the market dynamics effectively as explained in the first section of this presentation. Despite market challenges, our sales volume reached a healthy 375,000 metric tons in the first quarter, representing a 3% year-over-year increase. This growth demonstrates clearly the strength of our customer relationships and Alba's ability to capture market opportunities. On the supply side, we experienced a slight dip of 2% year-over-year with total production nearing 397,000 metric tons. This slight dip compared to the previous period in 2024 is owing to 2024 being a leap year. Our strategic focus on value-added sales continues to yield positive results and our VAP sales averaged an impressive 71% of total shipments, marking a 5% year-over-year increase. In real terms, our VAT shipments grew from 253,000 metric tons in Q4 -- in Q1 2024 to more than 265,000 metric tons in the first quarter of 2025. This growth in higher-margin products underscores our commitment to optimizing our product mix while enhancing our profitability. As for Slide 15, I will summarize it by referring to our Chairman's quote in the press release that we have released yesterday. While our reported profit -- I'm reading from the Chairman's quote, by the way. So while our reported profit down by 26% year-over-year to reach $48 million reflects the significant impact of higher alumina prices. It's important to recognize that had these prices remained at previous levels, Alba would have undoubtedly achieved an unparalleled financial performance, demonstrating our inherent earnings potential. And with that, I will leave the juicy details to be shared by our CFO throughout Section 3. Ricardo, the stage is yours.

Thank you very much, Eline. It's always a pleasure to raise with our investors community. I can start by making a short introduction about the quarter. We can say that the first quarter of 2025 can be summarized as a quarter of reliable operations, seasonal impacts and overall resilience against challenging market conditions. Alba continued its strong performance with one additional quarter of no LTI and no injury recorded as addressed by Eline before. And this was very important to pave the way to the recently achieved all-time record of 35 million hours of operations without any LTI. Alba has achieved its all-time record for a first quarter in both sales and VAP sales. And when we see from an operational perspective, the hot metal production was slightly below previous quarter due to the fact that 2024 was a leap year, and therefore, we had 1 additional production day on the same quarter last year. However, from a ton per day perspective, Alba has operated slightly above its performance on the same quarter last year, where productivity was -- has slightly increased. From a finished goods perspective, also as addressed by Eline, we were slightly below its previous year production, but -- and that was mainly as a consequence of low availability of scrap material, but we are confident that we will compensate that over the remainder of the year. Going to the slide, starting by the Slide 17. Slide 17 demonstrates our waterfall bridge on revenues. And we see that we have an increase of $210 million on revenues, around 19% compared to previous quarter last year. And that is mainly as a consequence of LME, higher LME, higher premiums and also a consequence of our strong performance in sales. As mentioned before, all-time record for our first quarter. If we go to the next slide, Slide 18, and if you look at our sales quantities performance, we see clearly on the chart that this increase of 12,000 tons was basically focused on the value-added products, which is really important for us because these are the products that deliver higher margin for Alba. And also that means 13,000 tons and also an increase on our liquid metal supporting our local downstream production at the expense of lower sales on commodity products. And this higher concentration on value-added products supported our higher premiums and also to benefit of the higher premiums on the Midwest and MJP as already addressed by Ed. If we go to the next slide, Page 29 -- Page 19, sorry, we see that our costs have increased around $195 million, and that's mainly due to the impact of price of alumina. So this $246 million negative impact is mainly due to alumina price, which was partially offset by our good performance in terms of consumption of major raw materials as well as our good performance on our power station, where we start to see the benefits of the implementation of Block 4. We see a positive impact on price of the other raw materials and a positive impact on alumina sales cost as this quarter, we have not sold any type of alumina vessels. We have a largely in line inventory absorption compared to previous years -- previous year quarter. And also, we see a positive impact of around $40 million that's mainly related to savings and timing on planned spending and also by exchange rate gains on euro exposures. Going to the next slide, Page 20, we see an overview of our performance from an EBITDA perspective. We see, as explained on the first slide of this session, a positive impact of $210 million of sales revenues, mainly due to LME price and volume, which was offset by the fact that we have not sold alumina vessels this quarter and at the same time, by the higher alumina price that impacted our direct cost heavily and the net impact on this line is $195 million. We also see a negative impact on selling expenses, and that's mainly related to the higher volume compared to previous year's quarter and also to the higher duties linked to higher LME prices. If we go to the Page 21, we're talking about cash flow and the balance sheet. It's important that we bear in mind while comparing quarter 4 last year with this quarter, it's important to mention that we faced some seasonal impacts driven by the overall customers' behavior, which is usual in first quarter. In summary, in this type of quarter, the customers' orders start very low and the sales becomes squeezed towards the end of the month of March, which impacts our sales and deliveries planned as well as our ability to collect cash within the quarter. So looking at this chart, you can see clearly that we had an impact from cash flow from operations of around $179 million positive, and that was offset by price impact on working capital, $76 million, around $16 million of that comes from higher aluminum prices and the remaining $60 million comes from higher inventory costs, mainly due to the higher price of aluminum. We have a working capital change of $127 million. The main impact on that is a timing impact on the vessels of alumina. This equates to $87 million compared to quarter 4 last year, where we closed the quarter 1 vessel below the average of inventory of the year, while this quarter, we have 1 vessel above the average of alumina inventories. So that brings an impact of 2 vessels when we compare these quarters independently, $87 million, and we expect that this will be normalized over the year. $53 million, also it's an impact of higher finished goods. We have produced 22,000 tons additional when compared to 2024 Q4, which again is a normal trend for this type of quarter. But it's important also to mention that we are basically closing at the average of inventories of finished goods compared with the average of last year. We have capital spending of around $73 million, normal capital spending of the plant. We funded ourselves through short-term debt to address this cash flow challenge related to timing as previously explained in around $91 million, and we have paid our shareholders in $100 million. Once we look at the operating and investing cash flow for the quarter, we have a negative impact of $97 million, which was explained mainly by the impact of pricing, $76 million and also the impact of working capital change due to the timing on alumina vessels and the lower sales than production and impacting our inventories of finished goods. Going to the last part, summary slide, we can see clearly that our revenue increased 22% compared to previous year's impact of higher LME premium and also higher volume. And this positive impact was offset by higher alumina impacting our price impact of our profits and decreasing our margin compared to previous year. If you see the last 2 lines, it's very clear the impact that LME had over the period, so around $400 positive compared to previous year and aluminum basically doubled compared to previous year's quarter. With that, I finish my presentation and back to our CEO, Mr. Ali Baqali.

Thank you, Ricardo, for the -- your update on the financials. I will cover the industry perspectives, and we are on Page 23. Being we are in a commodity business and despite all the challenges we faced in quarter 1, particularly on geopolitics and tariff constraint, actually, we had a good quarter. Despite all these challenges, we managed to land quarter 1 in a good and with a good profit compared to other businesses or other commodities businesses. If we look at the market, really still the market uncertainty is there. There are 2 main reasons for this. One of them is related to the ongoing concern on the tariff in the U.S., especially on the Section 232, which is increasing the tariff on aluminum and steel from 10% to 25%. Still, we feel that some of the premium in the Midwest is increasing, covering some costs. But for the time being, still the total on the price, I think it's not covering the total cost of this increase in the tariff. However, the second impact, which is due to the strengthening of the U.S. dollar and as a normal thing, if the commodity part -- the dollar -- in the commodity business, if the dollars increase, then definitely it will impact the commodity prices and reduce the prices and vice versa. If the dollars become weaken, then the community will be increasing in terms of the price. In terms of the demand and the supply, if we look at the demand because of the uncertainty in the market, especially because of the tariff, how the U.S. will land their negotiation with China. If you notice for the last few days, there is some agreement between U.S. and China to hold or to pause the tariff by 90 days and reduce the percentage. We saw that this reflected directly in the commodity prices. And today, we noticed that the LME price above $2,500, which is almost -- this is good indicative. That means because of this trade tension, this put a lot of pressure on the aluminum or the commodity prices despite there is a healthy demand we see in the future. In terms of the premium, if you look at MJP quarter 2, it was settled at $182 per metric ton and which is down by $46 compared to quarter 1. I think the premium, especially in the Midwest, it will continue to rise till the market will be fundamentally balanced in order to capture at least majority of the increase in the tariff of the 25%. The LME price forecast, as we forecasted in quarter 4 of last year, we said the LME price will be between $2,300 to $2,500. And I think the same trend or the same norm will continue. And I think till quarter 2 or quarter 3, if there is no major changes in the market, then definitely the price will be within the same ranges. If we go to the second page, which is Page 25 related to the major raw materials. The white materials, which I'm talking about the alumina and the aluminum fluoride, both of them are softening the prices because of the availability of the liquidity in the market. And there's a big change in the price. If you notice quarter 4, it was within the range of $700 per metric ton. And today, the market within the range of $350 per metric ton, which means there is a softening, there is an extra capacity come to the market. And hopefully, this -- the trend will be continued till quarter 2 and quarter 3. For the black material, which carbon material and liquid pitch, the price is still anticipated to increase a little bit because due to some shortage, especially in China. But I think that the price will not be going above the quarter 1 prices. If we move to the last section in the presentation, which is Alba priorities. As Eline mentioned and Ricardo mentioned, with a proud moment we achieved last week the 35 million hours without LTI. This is the first time in Alba history. We are very proud of this achievement. And this is -- we are setting a hard target for us in order to maintain and achieve. However, the top priority for us till the end of the year is to maintain our people's safety and summer is coming and you know our region, the summer is too hot and it's very challenging. That's why we have to prepare for now in order to give an awareness for our people. And the good thing for the last 7 years, we -- consecutively, we didn't have any heat stress or heat exhaustion. And this summer in Char 2025 is over without any incident, then we will mark a new record by having 8 years consecutive years without heat stress or heat exhaustion. In terms of operational activities, we are maintaining and pushing to have creeping as much as we can from all our bus lines and to be more efficient as well as to deliver our target -- ambitious targets on e-Al Hassalah program. Just to give you maybe a brief update or high-level update, the e-Al Hassalah program, it is 3 years program. Each year, we are targeting $60 million and last year, it will be $30 million, the total $150 million. And till quarter 1, we are on the right track, and I have a full confidence that by the end of the program, we are going to achieve the target. However, this program is totally different than the many programs we launched before because this program covers the traditional saving benefit from our operation as well as we are introducing some projects related to AI to improve our efficiency and reliability. Then we have many things we have to focus it -- to focus on it in this year or quarter 2 specifically, to reduce our carbon emission and the benefit will come this year because we operate or we commissioned Block 4 in the Power Station 5, which will reduce our carbon emission directly by 0.5%, which is very good, and we'll continue to deliver on our ongoing project. We almost completed the solar farm, and we are going to celebrate on that achievement. Also, this is a 6-megawatt project. It is a small in volume, but it shows that Alba is committed toward having zero net carbon by 2060 as per Bahrain commitment. And definitely, you are aware that we are the first smelter in the region will have a sustainable solution to create a dross. And we have our agreement with Daiki, Daiki, a Japanese company to build a plant in Bahrain to create such dross. And we are on planning stage. And definitely, the dross processing plant hopefully will be starting either by end of 2026 or maybe early 2027. Then for the new replacement line, we award the feasibility -- the final feasibility study to Bechtel, and we are going to get the outcome of this feasibility by quarter 4, hopefully, or at least latest by quarter 1 next year. By this, I'm ending the presentation. I will leave the floor to Eline to take it onward. Thank you very much.

Thank you, Bahrain. Desmond?

Yes, would you like to begin the Q&A session?

So -- yes, Anoop, would you like to read the question or would you like me to go through it?

No, I can read them for you. Maybe we should just open it for the questions on the telephone line, if there is any.

We have a question from the line of Shashi Shekhar of Citi.

I have a couple of questions. What is the upcharge for value-added product in the first quarter of 2025? And how this number is shaping up in the second quarter? My second question is more of a clarification. Previously, you had mentioned that sustaining CapEx will be between $100 million and $150 million on an annual basis. The CapEx on the new replacement line, will that be on top of it, right?

Sorry, what did you say, Shashi, could you repeat this question?

Yes. So previously, you had mentioned that sustaining CapEx for Alba will be somewhere between $100 million and $150 million on an annual basis. So the CapEx on the new replacement line, new replacement project, so this number will be on top of this number, right?

Yes.

Correct, correct. Yes.

Yes.

Did you finish the question or not?

Just a final bit. And what is the current capacity of Line 1, 2 and 3?

Yes, so I'd say -- go ahead sir.

Yes. Just to give you -- first question, you asked about the upcharge. We are not giving the forecasted upcharge or these are more marketing-sensitive information, we cannot share it on public. For the CapEx, you are right. We are spending almost between $100 million to $150 million on an annual basis. But once we go for the new replacement line, then the CapEx will be additional to that as a project. Then there are questions on -- what was the last question?

What is the capacity of Line 1, 2 and 3?

Yes, yes. Capacity of Line 1, 2 and 3, 300,000 metric tons.

Okay, got it.

Sir, if I may add something, Shashi, if you look at Slide 18 -- sorry?

No, no, continue.

Yes. If we look at Slide 18 of the IR presentation, it will give you the upcharge or the premium above the LME trend. So the premium inclusive of the upcharge, just to give you some guidance, it was -- it averaged in Q1 2025, about $311 per metric ton versus about $225 per metric ton. So the netback or the upcharge that we assigned into value-added products on top of the LME and the premium was never disclosed, Shashi. However, we disclosed the average premium on top of the LME price every time in the IR presentation on this particular slide where we provide a breakdown for Alba sales by product line and the premiums assigned on top of the LME.

Okay. So this upcharge is not included in this $311, right?

It is. It is included.

It is included, okay, okay, got it.

What I suggest, Shashi, we provided you on slides because you can do reverse engineering and you will get it. So if you look at Slide #7, we are providing you with the physical premiums, the indexes. You will see MJP, DDP and the U.S. Midwest. And you will see what the premium over that specific quarter. If you do the math and then you can take like a call because you know almost our distribution for the sales on a yearly basis, you will be able to assign...

Eline, it will be very difficult for him because we have different type of value-added projects. But on average, this is the average what Eline she told you. But individual project or individual upcharge, we cannot share. This is very sensitive. It's a negotiation power for us, we cannot disclose it.

Yes. He can have like a gist of it if he do reverse calculation.

[Foreign Language]

Yes, fine. Okay. Shashi, any more questions?

No, no, no, all answered.

Thank you.

There are no more questions from the phone line. Please continue.

Yes. So we have a couple of questions on the chat. The first is on the impact of U.S. tariffs and the domestic minimum top-up tax in Bahrain. How would these policies affect Alba's export competitiveness, profit margins and overall growth? And what measures can Alba take to mitigate these risks and maintain profitability as global trade shifts broadly on the tariffs and the DMTT.

Tariffs as well. So in terms of tariffs, it's important to mention that it is still early, right? We have seen that the so-called Liberation Day was only 40 or 50 days ago. So we are still seeing what will be the impact of the market, what will be the real tariffs that will stay. It's important to mention that Alba strategically is well positioned, mainly because it has a good position on the cost curve. It has -- it's not highly exposed to U.S. market and has a very strong position in terms of value-added products, which allows us to obtain access to higher margins. So the main point for now is we need to see how the markets will react, how the supply chains will adapt. And based on that, the main thing is that we are well positioned for that. From a DMTT perspective, we continue our work in terms of assessing all the legislation that was published. And we are dealing with MDR and dealing with our consultant to identify what are the impact for us. But at this stage, we are still doing this work, and we will be providing additional information as we have further clarity on that.

Okay. The next set of questions are on alumina from Nour Eldin Sherif and Aakarsh. So what was the realized alumina price for the quarter? That is one. Second is your inventories have shot up in Q1. Can you please give us more color on this? Are these finished goods or raw materials? And the third part is, since 1Q had a lagged impact of higher alumina prices, which was witnessed in 4Q, are you seeing a material decline in alumina costs while booking the materials since early this year? Basically, what is the outlook for 2Q? I mean, are you still looking at higher alumina costs in the second quarter?

Yes. What we can share by today mainly is that you can see alumina price index today is being traded at around $350. So a big decrease compared to what we've seen at the end of 2024 and beginning of 2025. We mentioned this before here in this call, we take a 2 to 3 months to see this impact hitting our P&L. And this -- we see that we still see mainly in the beginning of this quarter, quarter 1, some type of impact of this higher inventories that we still have in our books, but this we will also see during quarter 2, this trend going down. But at least in April, we might still see some type of impact from previous quarters. What else that was asked? In terms of the impact of inventories on cash flow, the main impact that we have was on this time related to alumina, as I mentioned, due to timing on vessels and the impact also on finished goods, mainly due to the fact that we have lower sales and production. I'm not sure if I missed it some of the...

No, this is the same question.

Okay. I think I addressed all the points. If not, please let me know.

No, just to follow up on that, a question from my side as well. I mean your inventories have gone up by about 13% quarter-on-quarter. So at the end of 2Q -- at the end of 1Q, are you sitting on a stockpile closer to like $500, $600 or is it much below that? I mean just some color on what sort of impact are you seeing at the start of 2Q? Is it still a very high-cost alumina that you're carrying?

We still have been -- end of March, we still had some high cost of alumina, but we have seen already this cost being diluted over Q2 as we are already facing the impact of the decrease in prices in our inventories. But at the end of March, our inventories were still somehow impacted by this high price from the previous quarters. Okay?

Yes, yes, yes. There's one on how do you see the market going forward regarding prices, supply and demand? I think you've already answered that in the call. But can you give some color regarding volumes for the rest of the year? So one on the market outlook and on the volumes for the rest of the year?

Would you like to take that one? Ali, would you?

Yes, yes, yes, you can take it, Ricardo.

Okay. In terms of the year, as I mentioned, it is still very early to see what will be the impact of the tariffs, of the demand in the U.S. and even how this would impact the other regions. So we might see some supply chain adjustments. Obviously, this might have some inefficiency, but that inefficiency might also impact the premiums across the region. We see already, as you know, U.S. and Midwest premium going up in this quarter as a consequence of the tariff increase. But as it is still very new what is happening and that we still are in the phase of the suspension of the tariffs, we need to see how the market will react. So it's early to see. What is critical to reinforce is that Alba is well positioned. Why? And I will repeat on that. Go on, go on, Ali, but just to summarize...

Just, yes, I want to add that in our sales book, we almost sold all our production -- future productions. If something happened in U.S., then it will be very easy for us to direct that material if the demand is low or there is some surprise. As Ricardo said, we are well positioned and we can direct the material anywhere.

And our exposure to U.S. is not that big. So we have the possibility of diverse taking into consideration the new market conditions that will come.

Okay. We have one more follow-up on alumina. How many months of alumina inventory do you have on hand?

We have around on hand, stocks on hand around 22 days. Obviously, we also have stocks coming in transit from Australia. We have a 3-, 4-week journey. But in terms of stock in hands, probably we are the benchmark of the industry of around 20, 21, 22 days every month. That's basically the way that we operate.

Clear, clear. Just one more from my side. So in this quarter, you recorded, I think, a $1.1 billion tax expense. That's about 6% of your profit before tax. What was that related to?

That was related to the good results that we have in Alba U.S. in the first quarter. So we had a profit in Alba U.S. So we accrued for our tax obligations in terms of yes, of this profit. So 30% of around $10 million, that means this impact that you have seen in our results. Nothing to this corporate income tax in Alba U.S. normal business.

But is this a new entity? Because in the past, you've never reported such an income tax figure where at least in the...

No, it's not a new entity. This is basically the results probably in the past, they were not that big because they -- Alba U.S. works basically as a trader. But we have the situation on this first quarter where the LME was increasing sharply, and they got the benefit of this increase.

Very clear. Yes, we have no more questions on the chat. I think we are done there. Yes, nothing in the Q&A queue as well, yes. Eline, back to you.

Thank you very much, Anoop, again for hosting the call. Thanks are also extended to SICO. Thanking each one of you who took the time today to be with Alba management over this webcast. And we look forward to catch up with you in -- for Q2 and the first half of this year. Meanwhile, if you still have any questions, please feel free and drop us an e-mail, and we shall attend to your questions as soon as we can.