UAE's Emirates Global Aluminium withstands COVID-19 disruption with 63% earnings jump
In 'most challenging year', EGA benefits from second-half demand improvement
Dubai: The UAE’s aluminium manufacturer EGA (Emirates Global Aluminium) recorded a 63 per cent growth in earnings before interest to Dh4.1 billion for 2020 – a year that’s been deemed as the most challenging for metals worldwide.
The gain was created through controlling costs and via new “project ramp ups” despite the disruption created by COVID-19. Plus, there was the recovery in demand starting from the second-half of 2020.
With sales of 2.52 million tonnes of cast metal (2.60 million tonnes in 2019), EGA is the third largest producer of primary aluminium in the world outside China.
“The recovery has continued into 2021, based on the brightening world economic outlook and growing optimism about the rollout of COVID-19 vaccination,” said Abdulnasser Bin Kalban, CEO. “We expect benchmark aluminium prices to remain around $2,000 (a tonne) for 2021 as a whole.”
Its Al Taweelah alumina refinery produced 1.92 million tonnes of alumina, close to its annual nameplate capacity of 2 million tonnes. Production was at or above nameplate capacity in each month of the fourth quarter.
EGA also operates a bauxite mining subsidiary Guinea Alumina Corporation in west Africa, which exported 9.56 million tonnes of the ore. This made EGA the second largest third-party seller of bauxite in the world in its first full production year.
Cash generated from operations were up 35 per cent to Dh5.5 billion from Dh4.1 billion in 2019. But revenues were down 9 per cent to Dh18.7 billion from Dh20.5 billion, “driven by lower world prices for aluminium and reduced demand for value-added products”.
According to the CEO, “EGA delivered a significantly improved financial performance in the most challenging year for the global aluminium industry in decades."