EGA takes Dh725 million hit from Al Taweelah attack, production recovery stretches into 2027

Dubai: Emirates Global Aluminium took a Dh725 million hit to its first-half net income following the March attack that forced an emergency shutdown at Al Taweelah, with aluminium production at the site expected to return to pre-incident levels in the first quarter of 2027.

Reported net income stood at Dh1.7 billion in the first six months of 2026 after accounting for the impact of the incident. Adjusted net profit, which excludes the impact, rose 34% year-on-year to Dh2.46 billion.

The disruption also weighed heavily on production and shipments. EGA's cast metal production fell to 1.006 million tonnes from 1.420 million tonnes a year earlier, while total aluminium sales dropped 32% to 939,000 tonnes.

Revenue declined to Dh13.54 billion from Dh15.07 billion, largely due to lower sales volumes following the incident at Al Taweelah, partly offset by higher realised aluminium prices.

EGA's Al Taweelah operations were significantly damaged on March 28 when Iranian attacks on Khalifa Economic Zone Abu Dhabi led to an emergency shutdown of all facilities at the site.

Restoring the complex is expected to require about Dh1.5 billion in capital expenditure, with most of that spending scheduled for 2026 and the remainder during 2027.

The aluminium producer has restarted 227 of Al Taweelah's 1,262 reduction cells, equivalent to about 18% of the total, after restarting the first restored cell on May 26. All three potlines have now been energised.

Hot metal production is expected to increase gradually as more cells return to operation, with pre-incident production levels currently expected in the first quarter of 2027. EGA said it is working to accelerate the timeline.

The regional conflict also affected EGA's ability to move aluminium to customers, prompting the temporary suspension of new outbound shipments from the UAE in March and causing domestic inventories to rise.

EGA has since established alternative export routes through ports outside the Strait of Hormuz, allowing it to gradually increase shipment capacity and reduce stockpiles in the UAE.

A return to pre-incident shipment levels is currently expected to depend on the reopening of the Strait of Hormuz, although EGA is developing alternative corridors to reduce its longer-term reliance on the waterway.

Inbound logistics remained operational, with raw material deliveries exceeding the requirements of the Jebel Ali operations and the Al Taweelah restart programme. Jebel Ali maintained uninterrupted production throughout the first half.

Higher aluminium prices, stronger regional premiums, lower alumina prices and cost controls helped cushion the financial impact of lower production.

Adjusted EBITDA increased 11% to Dh4.50 billion from Dh4.06 billion a year earlier, while the adjusted EBITDA margin rose to 33% from 27%.

Reported EBITDA was Dh4.42 billion after recognising a Dh84 million impact linked to the Al Taweelah incident.

The average London Metal Exchange aluminium price climbed to $3,382 per tonne during the first half from $2,538 a year earlier.

EGA's board approved an interim dividend of Dh1.72 billion, equivalent to 70% of adjusted net income.

Al Taweelah alumina refinery produced 602,000 tonnes during the first half, down from 1.142 million tonnes a year earlier following the March shutdown.

Production restarted in early July and reached 50% of pre-incident levels within days. EGA said the pace of the remaining ramp-up will depend on supply-chain conditions and its alumina sourcing strategy.

The company's Al Taweelah recycling plant has also resumed its ramp-up and is operating at about 10% capacity. Full production is expected by late in the fourth quarter of 2026.

EGA generated Dh353 million in improvements during the first half through its Najah 2.0 programme compared with its 2024 baseline, with gains coming from the alumina refinery, efficiency measures and procurement savings. The company is targeting Dh1.6 billion in annual improvements by 2030.

EGA continued work on its planned 750,000-tonne-per-year primary aluminium plant in Oklahoma, where it holds a 60% stake in a joint venture with Century Aluminum.

Commercial, permitting and technical work progressed during the first half, with first aluminium production expected by the end of the decade.

EGA is also advancing its planned acquisition of an 80% stake in Italian aluminium recycler Eco Green. The transaction has received regulatory approvals and is expected to close later this quarter.

The company ended June with Dh6.07 billion in cash and term deposits and Dh3.67 billion of undrawn revolving credit facilities. Total debt stood at Dh18.1 billion, compared with Dh16.9 billion a year earlier.

Cash flow from operations declined to Dh1.48 billion from Dh3.44 billion, reflecting a strategic increase in inventories to support operations during the Al Taweelah restoration and production ramp-up.