Qatar Aluminium Manufacturing Company Q.P.S.C. (QAMC.QA) Q4 FY2025 Earnings Call Transcript & Summary

Hello, everyone, and welcome to Qatar Aluminum Manufacturing Company Conference Call. Please note that this call is being recorded. I'd now like to hand over the call to Dana to introduce our speakers for today.

Hello, everyone, and [Foreign Language] to you all. This is Dana Sowaidi from QNB Financial Services. I would like to welcome everyone to Qatar Aluminum Manufacturing Company's financial results conference call. for the fourth quarter of 2025. On this call from management, we have Abdulla Yaqoob Al-Hay, Manager, Privatized Companies Affairs QatarEnergy; Rashid Hamad Al-Mohannadi, Head Investor Relations at Communications; and Ahmad Zakri, Assistant Manager, Financial Operations. We will conduct this conference call with the management first reviewing the company's results followed by a Q&A session. I will now turn the call over to Rashid. Please go ahead.

Thank you, Dana. Good afternoon, and thank you all for joining us. Before we go into QAMCO business and performance update, I would like to mention that this call is purely for QAMCO investors and no media representatives should be attending this call. Moreover, please note this call is subject to QAMCO disclaimer statements as detailed on Slide #2. Moving on to the call, on Thursday, 29th of January, QAMCO published its results for the year ended 31 December 2025. And today, in this call, we'll go through the results and provide you a key update on financial and operational highlights. Kindly note that the MS Team link is to display the IR deck on screen. In case you want to participate in the Q&A session, you must dial in through the telephone lines on the phone number provided as part of the invitation. Today on this call, along with me, I have Mr. Abdulla Yaqoob Al-Hay, Manager for Privatized Company Affairs; and we have Mr. Ahmad Zakri, Assistant Manager for Financial Operations. We have structured our call as follows: At first, I'll provide you with a quick insight into QAMCO ownership structure, its competitive strength and overall governance structure by covering Slide 14 and Slide 34 and 35 of the IR deck. Then Ahmad will provide you an overview of the broader macroeconomic environment impacting the sector, outline the dividend proposal, review the financial performance and highlight the latest development in our CapEx program. Finally, we'll open the floor for the Q&A. To start with, as detailed on Slide #5 of the IR deck, the ownership structure of QAMCO represents QatarEnergy with 51% stake and the rest is in the free float held by the various domestic and international investors. QatarEnergy being the founding shareholder and the parent of QAMCO provides all of the head office functions through a service level agreement, while the operation of the JVs are independently managed by its own Board of Directors, along with senior management team. QAMCO holds 50% share in Qatalum, which is Qatar Aluminum Limited, which produces high-quality aluminum of more than 670,000 tonnes per annum against a nameplate capacity of 575,000 tonnes per annum for customers across the globe. The facility includes a carbon plant, port, storage facility as well as gas-fired power plant. In terms of the competitive strength, as detailed on Slide #12, QAMCO joint venture is considered to be among the low-cost aluminum smelters with a state-of-the-art production facility, assured feedstock supply by long-term agreements with intense focus on HSE, which makes the JV a leader among its peers. As detailed on Slide #14 from competitive positioning perspective, QAMCO ranks among the top-tier companies within the industry at a global scale across most of the profitability matrices. This is a testimony to JV linear cost base and continued optimization drive, which keeps QAMCO JV on lower side of the cost curve among the global peers, resulting in strong margin evolution. Moreover, the JV global marketing partnership with the other JV partner provides an access to the strategically important market, which makes the company more competitive in comparison to its peers. In addition, the JV is capable of quickly shifting the product mix vis-a-vis from value-added product to standard ingot, which provides additional layer of flexibility to the JV in internal production processes, as well as supply chain management, while ensuring optimum production and sales volume in line with evolving market dynamics. We'll cover further details of the JV's operational activity and sales and marketing arrangement later on the call. In terms of the governance structure of QAMCO, you may refer to Slides 34 and 35 of the IR deck, which covers various aspects of QAMCO code of corporate governance and details. I will now hand over to Ahmad. Over to you, Ahmad.

Thank you, Rashid. Good afternoon, everyone. Thank you all for joining us. In 2025, the global aluminum sector operated in an environment that gradually stabilized over the course of the year with market fundamentals showing clear signs of improvement, while the early part of the year was marked by volatility driven by changes in global trade flows, energy-related cost pressures and broader macroeconomic uncertainty. Conditions began to normalize as the year progressed. Demand from key end-use sectors, particularly automotive, renewable energy, as well as electrical applications remained resilient and continued to support global consumption. On the supply side, industry conditions also evolved. Production growth slowed across several major producing regions and inventories declined steadily contributing to a tightening of the market. Together with consistent demand linked to the energy transition, these dynamics helped sustain aluminum prices at healthy levels despite ongoing geopolitical and cost-related pressures. Now moving on to our results for the year. QAMCO delivered a strong financial performance over 2025 with net profit reaching QAR 768 million, which is a 25% increase year-on-year. This growth was primarily driven by an improvement in average selling prices, reflecting more favorable pricing dynamics compared to the previous year. EBITDA stood at QAR 1.3 billion, with margins higher at 37%, underscoring the operational resilience of our business. Now these results highlight the strength of our business model and our ability to navigate a dynamic market environment while continuing to create value for all our stakeholders. Supported by a favorable macroeconomic environment and strong operational performance, QAMCO's Board of Directors is pleased to recommend a dividend for the second half of 2025 of QAR 0.057 per share, bringing the total dividend for the year to QAR 0.10 per share. This represents a payout ratio of 73% of net earnings for 2025. Now it's worth to highlight also that this proposed annual dividend is the highest since QAMCO's inception, underscoring the company's improved financial performance and resilience. This milestone has been enabled by disciplined financial management, strong cash flow generation and a prudent capital allocation strategy, including the settlement of a portion of outstanding debt and a reduction in the overall loan balance at the joint venture level. As a result, our balance sheet has been further strengthened, enhancing financial flexibility and supporting the sustainability of shareholder returns going forward. Allow me to dive deeper into QAMCO's net earnings for 2025 compared to 2024, as detailed on Slide #21. The improvement in net earnings was primarily driven by an uplift in both average selling prices and marginal improvement in sales volumes. The average selling price increased by 8% year-on-year, reaching USD 2,835 per metric tonne and this contributed approximately QAR 258 million to the overall net profit. Sales volumes also improved marginally by around 3,000 metric tonnes, which added QAR 8 million to overall net earnings, supported by favorable market dynamics. On the cost side, costs have increased. Our cost of goods sold has gone up and this was mainly due to higher raw material costs, which negatively impacted net profit by around QAR 136 million compared to last year. In addition, we also realized savings in finance costs through debt refinancing and partial loan repayments at the joint venture level, which further supported our profitability. As shown on Slide #22, quarter-on-quarter basis compared to the previous quarter 3, net profit in quarter 4 surged by 22% to QAR 233 million. Higher realized prices, which was higher by 6% is offset by 7% decline in sales volumes, while lower direct operating costs further supported profitability. Now let us move on to CapEx. I draw your attention to Slide #28. As you can see on this slide, QAMCO's joint venture continues to prioritize operational efficiency, cost competitiveness and high standards of health and safety, ensuring asset reliability and operational integrity. Planned CapEx over the next 5 years focuses on essential maintenance and operational requirements, including pot relining and major turbine inspections. Total CapEx attributable to QAMCO is approximately QAR 1.2 billion with an average annual CapEx spend of around QAR 250 million of which pot relining represents around 35%. In parallel, targeted investments will continue to enhance operational efficiency as well as advance sustainability initiatives, supporting the joint venture's ambition to become a lower carbon aluminum producer and ensuring long-term value creation for all stakeholders. Now I will hand over back to Rashid.

Thank you, Ahmad. By this, we conclude the presentation. Now we will open the floor for the Q&A.

[Operator Instructions] Your first question comes from the line of Rob Skepper of Ashmore.

A few questions from me. The first one, just on the sales volumes into year-end in the fourth quarter. So yes, production operating as normal, but yes, you said sales a little bit soft at year-end. Like what kind of activity you've seen so far in the first quarter? Is it like buying normalized? Is that inventory been utilized?

Thanks for the question. I think, yes, we've seen a bit of a slowdown in sales in the fourth quarter. And I think if I understand your question, what's the outlook for the first quarter of this year. Am I right?

Yes, just in what's happening, has there been a catch-up?

Yes. I think -- definitely, I think usually, what happens is sometimes sales volumes quarter-on-quarter is also influenced by the timing of the shipping. And what we have seen is that sometimes shipments that are supposed to be completed in 1 quarter, for various logistical reasons, get deferred or pushed into the subsequent quarters. So sometimes you see this fluctuation in variations quarter-on-quarter because of this reason. I would say that if you look at our sales volume in quarter 4, yes, it's dropped against the previous quarter. But I wouldn't -- I don't think we are that concerned about this. I think it's part of the normal market conditions, and we do expect demand -- overall demand for aluminum products to continue to remain strong. In fact, if we look at prices for aluminum products, for the month of December, the LME price is close to 3,000 metric tonne -- USD 3,000 per metric tonne. And it got -- it went up even higher around now in the past month in January, and prices continue to hold strong, even as we enter into February. So we have no concerns with regards to demand. We believe that demand continues to remain strong. And that as part of our plan to capture this demand, we are ensuring that our ability to produce more efficiently at the plant is continuously maintained and even enhanced, and I think that is the primary focus of our joint venture. And we hope that 2026 will be an even better year for QAMCO and Qatalum. And all the signs that we are seeing since the start of the year seems to indicate that things are -- the market is -- market conditions are good. So yes, hopefully, that addresses your question.

Yes, brilliant. And then I just wanted to ask on margins. So yes, I mean, 2025 was punctuated by a change in the margin structure. So throughout 2024, aluminum prices weren't doing a lot. Alumina into the year-end last year had a big spike on some supply issues, and we've sort of seen a big reversal this year. Your margins have been very stable through '24 and '25 until the fourth quarter where we see a big jump as aluminum continue to go up and alumina continues to go down, and we've seen that continue into the start of 2026. In terms of that margin, though, for the fourth quarter, is there anything one-off? Is there any inventory impact? Like how should we think, given the prevailing aluminum and alumina prices today, how should we think about the kind of JV EBITDA margin level?

Thanks for the question. I think what we would suggest is when you look at the EBITDA margin, it's not to look at margins on a quarterly basis, but more to focus on broader average across the entire year. But sometimes you will find the timing of the purchase of alumina, the timing of the -- some production activities at the plant will be different quarter-on-quarter. There could be some adjustments quarter-on-quarter. There could be some differences in the production mix, the sales mix. So a better indicator of EBITDA margins is to look at the annual number. And as you rightly pointed out, the annual EBITDA margin is relatively stable. In fact, thanks to the higher average selling prices. If you look at the EBITDA margins for 2025, it's slightly higher at 37% compared to last year of around 35%. And this was primarily driven by higher average selling prices. If you look -- if you think about what's moving forward, I think you should expect EBITDA margins to remain relatively stable around this number because we don't expect any shocks or any structural changes to the business model unless -- because usually, as you know, our main costs are primarily alumina, that alumina is the main raw material for us. And we purchase alumina on long-term contracts and those prices roughly track the market prices for alumina as well. And over the longer term, prices of alumina effect aluminum prices closely as well. So unless there's a major structural shift in this dynamic relationship between alumina and aluminum, I don't think you should -- you can expect any major change in the EBITDA margins moving forward. We do have plans and -- included in our 5-year CapEx plan. We do have certain plans to improve efficiency of our production process at the plant. But then again, these improvements will be gradual. And again, this should not result in a drastic shift, a drastic increase in our margins over a short period of time. So -- but what you will see from time to time is that there could be certain supply shocks, which relatively will be more in the short term. So you could have to -- say, for example, in a single quarter, you could have suddenly a major bit of alumina and alumina prices suddenly go down. And then by -- we can aim to maximize our costs by purchasing more alumina when prices of alumina are down, we can purchase pot to build up our inventory. And if we time our production and our sales, right, then you could see some improvements in margins for that short period. But over the longer term, we expect EBITDA margins to improve gradually because of the various efficiency efforts that we are undertaking. But we don't expect to see any major structural shifts or shocks that will drastically move the EBITDA margin.

Okay. I mean I guess you could argue we're in one of those shocks at the moment, right, because for the last, call it, 5 months, there has been different dynamics that have been driving a tight market in aluminum and a very slack market in alumina, the gap has opened up. And so just to understand your long -- so long term, that's unsustainable because long term, they should converge because at some point, you get a rebalancing, but at the moment, we're in one of those shocks, right? So we should continue to see abnormal kind of windfall profits if this maintains for the first quarter or the second quarter, for example?

Yes. Yes, you're right. you're right.

Yes. And then my last one, sorry, I'll let someone else ask, but my last question was just on the debt within the JV. So reasonably significant deleveraging for the last few years kind of from 2022 to through the end of 2025. So yes, you kind of cleared QAR 2 billion of debt at the JV. Like what's the target cap structure there? Like is there a point at which the deleveraging slows down and dividend upstreaming increases? Like what's the kind of thinking there?

I think when it comes to debt, the philosophy has always been we want to be very, very financially prudent. And we want to have a very optimal level of debt. And by optimal, I mean, we want a very manageable size of debt that Qatalum, the JV is able to service regardless of the up and down cycles of the aluminum commodity market. And as part of that prudent financial discipline, that partly drove the reason for the debt restructuring. And moving forward, we -- the JV nor QAMCO does not have any plans to incur more debt. The current debt, we believe, is optimal. And we believe that this current level of debt will allow us to essentially continue to operate at a very sustainable level regardless of the shocks and the potential pressures that may come in the aluminum market. But if you look at our current debt, it's actually quite long term. It's a 7-year loan. Interest rates are very competitive. And when we planned for this debt, we did a careful assessment of our cash flow projections over the 7-year period, and we have factored in what's the low case for aluminum prices, what's the high case for aluminum prices, and we built in some risk models around it. And all of that, we believe this is the level of debt that is sustainable. And we believe that regardless of whatever happens to the market conditions, the JV is in a very strong position to continue to service this debt in a sustainable manner. And the JV at this point in time doesn't have any plans to incur more debt. At this point in time, we believe that the cash flows that are generated by the joint venture is more than sufficient to sustain and finance the working capital requirements, including the CapEx plans over the next 5 years as well as allowing the JV to upstream a reasonable level of dividend. In fact, as you would have seen from the announcement on this dividend, this is the highest ever dividend at QAR 0.10 or QAR 0.1 per share. It's the highest ever in the history. So I think we want to maintain a conservative capital structure, low debt. We want to be able to withstand any downside pressures that may come because we don't know with the geopolitical uncertainties that we see in the world today, whether some of it may ultimately impact aluminum prices over the medium or longer term. So we want to keep the JV in a very strong position to be able to weather in case there's any shocks in the market. And not just sustainably -- not just being able to sustain the debt repayments, but also to continue to invest in CapEx as well as generate -- allow a generous dividend. So I think all in all, we believe we are in a good place. The capital structure is currently in a good place. We don't have plans to shift the capital structure or change it drastically. And we -- our focus now or the JV focus now is really in terms of continuing to maximize the efficiency of the production capacity at the plant and continue to generate strong cash flows and generate healthy dividends for all our stakeholders.

Your next question comes from the line of [indiscernible] of QIC Asset Management.

A few quick questions from my side. One is on productions and -- production and sales. Do you expect similar production levels in 2026 relative to 2025? And the second one is on future capacity. Do you plan to add any future capacity? And do we have any shutdowns in this year, in 2026?

Thanks for the question. So you've got three questions, right? So first of all, is in terms of production, whether you can expect any large capacity additions. Okay, we currently have no significant plans for the large-scale capacity additions, no. But what we do have and is included as part of our 5-year CapEx plan is incremental improvements in the efficiency of the plant. And what we mean by efficiency of the plant is you are able to produce more using the existing facilities that you have and you also minimize the consumption of energy and raw materials, but still be able to produce either more or to produce the same product for the same amount of raw materials that you consume. So the focus is really on maximizing the efficiency rather than doing a large-scale capacity addition. So I think as far as your question -- your second question is do -- can you expect any -- what's the production outlook for 2026? You will see incremental improvements [Foreign Language] incremental, meaning production-wise, it should not -- don't expect 20%, 30% increase in production numbers because, as I said, we are not embarking on any grand large-scale capacity additions, but rather small scale gradual incremental improvements in production coming from efficiency initiatives, right? It's about maximizing current efficiency in our current existing facility. So that's on production. And what was your third question, again, whether there are any planned shutdowns for maintenance? No, as aluminum smelter, aluminum plant that operates in Qatar, we do have our annual production plan. We also have our annual maintenance plan as well. And this is part and parcel of every aluminum plant in the world, every facility in Qatar. So in this approved annual maintenance plan, there will be planned shutdowns. But this planned shutdown already takes into account the technical requirements of the plant, and it's also -- it also takes into account our annual production plan as well. And when I say annual production plan, we also have an annual marketing plan. So we have an annual marketing plan that drives our production plan and our production plan is aligned with our maintenance plan. So any shutdown are all part of this annual maintenance plan, which ensures that any temporary reduction in production is managed on an annual basis across our annual marketing and production plan. So to address your concern, there's no -- you should not expect any unplanned -- any major unplanned shutdown. Shutdowns are part and parcel of the operation of the aluminum plant. And we have taken all this into consideration in our annual marketing and production plan.

Your next question comes from the line of Abdul Rahman of Jadwa Investments.

I just have a quick question regarding your margins. So you mentioned that the full year margins of 2025 of around 37%, that's regarding EBITDA margin, is more or less sustainable going forward. But considering our aluminum and alumina trade today and expecting flat volumes, shouldn't we expect a more closer to the 43% that you achieved in the fourth quarter, especially now that prices are around QAR 3,000 compared to what you realized in the fourth quarter of around QAR 2,800?

Yes. Thanks for the question. So I mean, if you look at our historical EBITDA margins, I don't think you will see across several past quarters, I think you've been seeing steady EBITDA margins hovering around the 30% to 35%. So -- and in fact, if you go further back, the only time that you see our EBITDA margins like going into the 40s is during those post-COVID era where demand for everything in the world, all commodities in the world, demand for all commodities in the world spiked. There's a hyper demand for everything that's driving everything up. So I think what you see in the fourth quarter at 43% EBITDA margin, I don't think this is a number that you should expect moving forward. Because I think, as again, I mentioned, sometimes you will see on a separate individual quarter, you will see some supply imbalance because of logistics, because of some supply shock somewhere. So you will see this on a quarterly basis, but it will balance itself out. It will normalize itself out on an annual basis. And if you look at what happened in the fourth quarter, you see that the alumina prices have come down significantly, whereas aluminum prices have gone up. But I don't think this trend will continue for too long. Because I think if you look at historical correlation between alumina and aluminum, it tends to be to have a more positive correlationship. So I think to answer your question, if I were you, I wouldn't anticipate or project a flat 43% EBITDA margin across the forthcoming 4 quarters. I think a more realistic expectation is our EBITDA margin should hover around our historical numbers. And I think if you look at how our margin's compared to our peers, right? And this is clearly shown in the peer comparison slide. Our EBITDA margin is quite good, and it's very strong. In fact, if you look at Slide #14, we're #1. And all our other comparable peers are lower than us. So I think at the current EBITDA margin of around 37%, we are industry leading when it comes to margins, operating margins, EBITDA margin. And I think this is something that we aim to continue to maintain and preserve. And the focus, again, is on efficiency, making sure that we continue to produce and making sure that we achieve all our production targets, achieving our annual marketing plan. And that's the focus. Yes, I hope that answers the question.

Next question comes from the line of Akash Tomar of SICO. Moving on. Our next question comes from the line of Nurelddin Shariff of Arcan Capital.

A couple of questions for me, if I may. Can you explain why the premium for the JV that sells at declined compared to LME prices in Q4 specifically?

Thanks for the question. Okay, so when we talk about premiums, it's quite complicated in a sense there's many factors that influence premiums. And even when we talk about premium, there are different premiums for different regions around the world. So there's the MJP, which is a premium for Japan in Asia, there's the Rotterdam in Europe, there's also Midwest premiums that covers U.S. and North America. So first point to note is there are regional premiums, which essentially are sort of like the surcharge that covers the cost associated with transportation, storage, insurance, basically reflecting the regional supply and demand dynamics. Now in terms of how premiums are assessed, there's not a single simple fixed formula. But what you can find is that there are agencies like S&P Global Platts and Fast Markets that actually do this analysis, and they do this through daily or weekly surveys of the physical market participants. And in terms of how these premiums or what are the key factors that influence these assessments or ultimately these premiums is that I mentioned this -- I've alluded to this earlier, location is a key factor. Premiums can vary significantly by region, right? For example, the U.S. Midwest premium is a well-known benchmark and it's different compared to premiums in Rotterdam or even Shanghai. Now that's one factor that influence this. Second factor, product quality and the form. So different product qualities, different product grades with different purities have different premiums attached to them. Then the third factor, logistics and tariffs. The cost of freight from the point of origin to the point of destination is another major component that influences tariff. And on top of that, when you talk about logistics, there's also tariffs as well. So there are any prevailing import duties or tariffs can also influence the premium determination. Then there's also the timing, the time window. So specific timeframe for a specific delivery also comes with different levels of premium. Then there's also regional factors that can happen localized to a certain region like suddenly there's a big stockpile of aluminum products in a particular region, then the premiums should come down, right? So there's many, many factors that influence this. So if you look at on an annual basis, our premiums actually came down a bit from $281 down to $272. So to answer your question, there's no single one factor that explains the reduction in the premium. But it's the combination of all these factors together. So you can see our product mix, right? So some of the products that we sell attract the lower premium compared to the products that we sold. So it's influenced by the sales mix. Then if you look at the geographical distribution of our sales in 2025 versus 2024, there's a change in that -- in our export market as well. So because of the change -- because of this change, the premiums also move. Like certain markets, certain regions attract different premiums. Then what you can see in the world today, there's a lot of geopolitical uncertainties. So different regions, right? Sometimes in certain quarters, you have certain additional premiums or premiums come down because President Trump announced something or because there's some certain localized issue limited to that particular region that caused supply and demand to suddenly become imbalanced. And then you have an impact on the premiums for that region for that quarter. So I don't have a single simple bullet to answer your question as to why it's lower, but it's a combination of all these factors influenced by sales mix, the geographical distribution and regional events, local regional events such as logistics, tariffs, supply-demand within that particular region. So all these factors in combination has resulted in that movement in the average premiums that we realized for our aluminum sales in 2025 compared to the prior year. I hope that answers your question to a large extent.

Your next question comes from the line of Akash Tomar of SICO.

This is Akash Tomar from SICO. Congratulations on a great set of results. So for me, I mean, it's a question on the similar lines that have been asked before. But I just want to understand the reason for it. So for example, I acknowledge and I appreciate the fact that your EBITDA margins are pretty stable. But I just want to understand why is that the case? So for example, LME prices went up about 7% to 8%. Your revenue went up 7% to 8%. But on the other hand, the spreads went down -- spreads increased because alumina went down by 30%, but your EBITDA only grew by 14%, whereas if you look at other players in this -- in the same industry as you, because of the increase in spreads, they had a much bigger expansion in the EBITDA in terms of percentage growth. So is there an inherent difference in the cost structure, the way your costs are placed that it doesn't give you full incentive when the cost for alumina goes down? Is that the case? I mean just thinking out loud.

Thanks for the question. Look, I mean everything you've explained is correct. It's just that there's also the additional factor of the inventory movement as well in the fourth quarter because the timing of when we purchase alumina and the timing of when we sell it an expense is also a factor as well. Now I think I wouldn't want to dwell too much in terms of the high EBITDA margin in the fourth quarter. I think enough has been explained in this regard. I just want to highlight the point that the 43%, I don't -- you cannot expect this EBITDA margin to continue for the remaining quarters. And I think the fact that if you look at the fourth quarter, aluminum prices are super high, around close to QAR 3,000, but alumina prices have come down by a lot compared to the early part of 2025, I think that definitely played a factor in the higher margins. Now why ours is higher compared to other players, I think a lot of it has got to do with the timing, our inventory purchase timing, the logistics as well as the overall events that happened during the quarter. So I hope that, that answers your question on the fourth quarter. And I think we -- for us, if you look at the EBITDA margin as a whole, 37% is already way above all our other peers. If you look at the Slide #14, right, our EBITDA margin is #1, if we compare to the -- other comparable peers. And I think moving forward, you can expect this -- our strong EBITDA margins to continue. As I've mentioned a few times already throughout this conference call, quarter-on-quarter, you may have fluctuations here and there, but I think historically, it should still remain within this range. I hope that answers your question.

Apologies. To go back on it again, I was not referring to the quarterly results. So my question is more from a cyclical point of view, from a longer range point of view. I totally agree with what you said about alumina in the longer-term tracking aluminum fundamentals. My question was that for the entire year, your revenue goes up in line with the LME but your EBITDA, and I'm not even referring to the margins here, I'm just referring to the growth in EBITDA, so the growth in EBITDA was way less compared to international markets, benchmark, the spread, the benchmark had seen. And it's not about a quarter, it's about -- I just wanted to understand if there's any structural cost agreement that you have, which -- I mean, as you said, it has been pretty stable. So when alumina was increasing a lot like other players were suffering, you were not even suffering that much. So is there a...

Yes. Just to add here, I think some other peers, they are integrated aluminum smelters. So they have mining as well as part of their portfolio. So to have a player that is like us uniquely that produce aluminum and -- so you can compare us to several peers, but not all the peers. So if you compare to comparable peers that are operating in aluminum and they don't have the mining sanctions, then there will be a comparable kind of comparison. But I think all in all, I think the performance for the company has been well. And usually, towards the year-end, you have certain kind of things that will flow in terms of adjustments that need to be happened. So that's why I would say that in Q4, it's not realistic to be considered as a benchmark. So the best benchmark would be is to look at your full year EBITDA margin and then extrapolate that going into the future. I think the future for aluminum is quite an exciting one, especially looking at how the world demand is growing. And we -- currently, this year, I think we embark upon demand superseding supply. And going forward, based on reports that we've seen, we're expecting to see somehow a narrowing in the gap between demand and supply, and that's due to the additional capacity coming out of Southeast Asia. Plus also, we have the alumina being under stress because we have a lot of capacity expansion that took place during this year. That's why you have the delta for most of the aluminum producer globally is bigger between alumina and LME. And that's why you're seeing a lot of smelters performing well this year. And going forward, it will depend on how things will unfold during this year. So this is in a nutshell. I think the company performance is good. As I mentioned, Q4 is not a benchmark. Your best benchmark would be looking at the full year and extrapolating that going forward, et cetera. In terms of sales volume, typically, what we like to say to the investors is that between quarter-to-quarter, you have divergence or difference. But towards the year-end, usually when you look at year-end sales volume, it stabilizes year-on-year with potential uptick or a potential downtick depending on the demand cycle of the commodity. So what happened in Q3, I would say it's more of a catch-up and plus the Incoterm plays a big role. Then Q4, you have lower sales volume. But all in all, we strike a balanced sales volume compared to last year and the year before, et cetera. So it's more of a stable business. I think it's easier to consider and look at.

Your next question comes from the line of Anoop Fernandes of SICO.

Just one on the CapEx on the projects actually where you've highlighted investments in sustainability-related investments and production of low-carbon aluminum. Could you please talk a bit more about that? What is the road map here? And how do you plan to produce low carbon aluminum?

Thanks for the question. I think, first of all, it's important that Qatalum positions itself as a low-carbon aluminum producer because we are seeing increasingly the markets around the world continue to impose requirements with regards to low carbon content, ESG, sustainability requirements on and so forth. Now in terms of the CapEx plans, I'm not at liberty to discuss the full details of it. But I think included in the CapEx plan are things that we are exploring around things like solar, for example, how do we include solar energy sources rather than using gas or to reduce the consumption of gas by relying on other alternative forms of energy, such as solar. So solar is one option. So that's one area that we are looking at. And the other area that we are looking at is potentially looking at using scrap, aluminum scrap and purchasing scrap and turning scrap into aluminum products. And basically, it goes back to the circular economy, right? Because scrap is considered a waste product. So if we can utilize the scrap and turn them into valuable aluminum products and sell them to the market, then basically, it will contribute towards having lower waste and achieve a sustainable circular economy. So some of these are included in our 5-year CapEx plan and it's in line with our aim to become a low-carbon aluminum producer. The other point to highlight also is that apart from moving forward in the 5-year plan, we have also embarked on some of these initiatives to actually lower our carbon emissions. So some of the CapEx that we have spent as well as CapEx that we have planned in the next 5 years includes making certain improvements to the plant production facilities such that we are able to reduce the carbon that we emit throughout the production process. And I believe if you look at the whole year of 2025, if you look at the carbon emissions that the aluminum facility has emitted, it's the lowest ever. 2025 is the lowest ever carbon emissions produced by Qatalum since inception. And we are quite proud of this achievement, and it's the result of a lot of hard work, the result of the CapEx that we have spent over the past 5 years. And we will continue to aim to continue to reduce this and sustain this moving forward. So I hope that gives you a bit of color in terms of our plans moving forward with regards to sustainability and low-carbon aluminum production.

And also one point, when you have the gas turbine inspection, you usually do some upgrade to increase the efficiency of the gas turbine, reducing your gas emission or reducing your gas consumption and hence, you're reducing your carbon footprint. Also, we have one project to do with reducing the fuel that is produced during the production process for aluminum. So this is one project that Qatalum is embarking upon. So they have a lot of initiatives that they have taken under their belt. And the overall gain or overall objective is to reduce the footprint of carbon that is fused to our facility. Already, we are one of the -- I would say, we are sitting on the lower side of the carbon curve in terms of emission because we utilize gas to produce electricity to produce aluminum. And we are also striving to further enhance that and increase our efficiency and reduce the footprint.

Understood. Just a follow-up. So if I remember, I think a couple of years ago, there was this project on turbine efficiency. I think it was something with GE that you had. I just wanted to know if that thing is over or is it ongoing? That is question one. Question 2 is, as a follow-up is -- I mean, is the plan to buy solar power from QE on the cards? Because what we understand is a massive solar project that they are undertaking over 2 gigawatts. Is that -- because I mean, small-scale investments in solar power will not really meet the requirement because the smelter consumption itself is so high. So is that on the cards as well?

Yes. So you're mentioning about the AGP project. I think in 2021, we announced upgrading our gas turbines. And we did that. And basically, right now, we do have, I think, if my memory serves me right, 3 gas turbines, 2 are running. We have one on backup. In case one goes in the maintenance, the other will be ready for operating. So basically, this is done in 2023. I think it was done, and it's up and running. But part of your inspection and maintenance will be -- part of your plant maintenance will be inspecting the turbines and doing the upgrade -- necessary upgrade that is required by the manufacturer for the turbine. And you would expect some, I would say, gradual kind of improvement over those inspections, and this is what I was referring to. Going back to your question about purchasing from QatarEnergy, this is nothing has been -- I think the JV has not discussed this with QatarEnergy, and currently what they are looking after is doing some kind of solar panels within the facility but still, it's at the study stage and has not been FID-ed by the joint venture yet. But the aim for this is to basically -- it will generate some kind of electricity, but it wouldn't be material compared to our energy mix. As you know, we have electricity power plant within our fence. And if we do something for solar, it will not be as big as what we are producing out of the current electricity plant. So it will be, I would say, a small marginal kind of solar power if it's FID-ed by the joint venture.

Next question comes from the line of [indiscernible] of SICO.

Perfect. Congratulations on the results. I'm sorry that my question is going to be regarding your EBITDA margins. But if you could just clarify one point for me on Page -- on Slide 24, your EBITDA margins in the year 2021 were an -- increased from 28% to 37% to 41%. Now if you look at what happened in 2021, aluminum prices went up and alumina was also slightly higher. So given that the new norm seems to be hovering around the 35%, 37%, I just want to understand what happened in 2021 that led for such a surge in EBITDA margins?

So if you look back at the 2021 scenario, you will see that the EBITDA or the aluminum price has hiked in 2021. However, the alumina price did not have the similar kind of reaction. So the alumina did not increase as much as LME. And that's why there was a surge in a few quarters. And then when things stabilize and prices of alumina has increased, you'll start to see stabilization in the EBITDA margin. For us, we incur the alumina from the market. It's a market rate. And of course, our market arrangement is or, let's say, purchase arrangement with each supplier is different, but it's linked to essentially the index of alumina or the index of aluminum depending on the source of the alumina. So currently, what happened, you see in quarter 4, you have the alumina prices has stabilized quarter-on-quarter. The prices of basically your aluminum has increased. Plus also, as I mentioned, you had some adjustment that happened towards the year-end, that has impacted your cost of goods sold or direct cost. And that's why you're seeing a benefit flowing into Q4 and you're seeing that big hike. But essentially, what we're trying to signal that what you've seen in Q4 is not the norm. You should consider something which is more sustainable which is the full year kind of EBITDA, which was 37%, which was a hike over the last year by 2%, but still a hike but a marginal hike. I wouldn't signal it as a hike, that you see prices going forward, EBITDA in the future will be 45% or 46%. But as I mentioned, again, the alumina market is following a different dynamic. We are seeing some supply in the market. The index of alumina has been under stress because of the extra supply in the market coming out of China, coming out of India. At the flex side, you have a demand superseding the supply for alumina -- for aluminum. And hence, why you're seeing aluminum prices going up and the alumina prices under stress. But I mean, the alumina price will gradually take a rebalancing kind of a view, depending on all these projects coming online, I think, next year, based on what I've seen from Bloomberg, you'll have new additional capacity of aluminum coming online. I think 1.4 million tonnes are coming out of Southeast Asia. So that will kind of absorb the extra alumina in the market, and it will depend how the price of alumina will evolve depending on the demand. But essentially, the 43% is not a good indicator for the future.

Okay. And just in terms of your cost formula, does it include or does it have any link to aluminum prices?

So basically, our cost of goods sold is linked to our raw material. The biggest raw material we're consuming is alumina. Then you have coke pitch, chlorofluoride, alloy and a smaller kind of a scheme. But I would say 70% of our raw material is alumina. The rest is different raw material. And then you have the energy, which is basically the gas flowing into our facility to power the facility. So this is basically our cost mix.

Your next question comes from the line of Abdul Rahman of Jadwa Investments. Your next question comes from the line of [indiscernible].

My question is regarding the dividend payout. We calculated the free cash flow at around QAR 900 million to QAR 1 billion. Why isn't the company distributing more dividends to shareholders?

So basically, right now, we distributed around 73% of the net profit. If you look at it, plus also you look at the payment that we made to cater for the CapEx and also the payment we made to cater for the loan repayment. I think the company is moving on the right track in terms of distribution. Also, we remain cautious in terms of the future of aluminum, and we are building that reserve to cater for the debt repayment and also to cater for any future volatility going forward with aluminum, so we can sustain good and healthy dividend payouts in the future. So basically, the dividend was higher than last year. And as we said, this is the highest dividend that was given in the history of QAMCO. I think in 2021, we gave AED 90 or AED 9. And I think in 2025, we gave right now, AED 10, which is a high compared to -- I think, 2021, even we realized the higher net profit versus this year. But this year, we -- despite that, we realized lower net profit, we gave better payout. So if you look at it in that scheme, the payout ratio has improved.

Do you have any plan to link the dividend distribution to free cash flow on the net income?

Currently, there is no plan. But basically, the Board looks at the performance of the company during the year, and then they make the decision to recommend a certain dividend giving them.

The other point I will add is that the Board looks at the company plans, they also look at the affordability. They also consider the fact that there's debt that needs to be serviced. And they also take into account the outlook as well, market outlook over the medium term as well as the long term. So there's a few elements here that go into the Board's decision, affordability, future CapEx plans as well as a need to ensure that the company is always able to withstand any unexpected downsides or downturns that may happen. And given the geopolitical uncertainty that we see in the world now, I think it's important to always be financially prudent and conservative. And that has always been the hallmark of QAMCO and Qatalum in terms of how we manage our finances. So I hope that addresses your question on the dividend.

Noted. Would the company be interested to increase it's stake in Qatalum at any point in the future?

I think currently, there is nothing on the table. As you know, we have the other partner with us, Hydro, and they are with us and the joint venture extend, I think, to 2050 or 2041, if my memory serves me well, I think 2050. So we do have a long-term partnership with them. And currently, QatarEnergy owns 50% of QAMCO and there is no plans on the pipeline to acquire -- to increase the stake.

And final question, please. Any changes expected in the taxation?

To answer your question, no. There's no changes to the taxation. Things have been stable, and this is the situation as is, and we don't expect any changes.

We don't have any pending questions, I'd now like to hand the call back to Dana for final remarks.

Okay. So if there are no more questions, we would like to thank the company's management for the results update and for taking the time to answer all queries, and we look forward to speaking to you all for the first quarter results.

Thank you for attending today's call. You may now disconnect. Goodbye.