Emirates Global Aluminum scores record results for 2022, and this will only intensify market talk about an IPO. Image Credit: Supplied

Dubai: The UAE’s manufacturing powerhouse, EGA, drew record results in 2022, with revenues at Dh34.6 billion, a substantial 36 per cent increase. The firming up of metal prices during this period helped as did a significant pick up in demand from end-user markets.

That translated into a net profit of Dh7.4 billion, a gain by an equally impressive 34 per cent from Dh5.5 billion. The cash from operating activities came to Dh12.7 billion, an increase of 70 per cent.

These numbers come as speculation keeps mounting that EGA (Emirates Global Aluminium) could be the next blockbuster IPO from Abu Dhabi.

Read More

“Our performance demonstrated our resilience and strength at every step of the value chain,” said Abdulnasser Bin Kalban, CEO of EGA, “I am confident that EGA will deliver another competitive performance in 2023 compared to peers in the sector.

“We delivered our best-ever results by focusing throughout the year on what we control – the safety of our people, operational excellence, our costs, and our commercial relationships with our long-term global customers.”

But the outlook on aluminium demand for this year is slightly clouded ‘due to its close correlation to the health of the global economy’.

“More broadly, the prospects for EGA and our sector are very strong due to aluminium’s role in decarbonisation economy-wide. EGA will capitalise on this significant opportunity,” the CEO added.

Solid on margin

The adjusted EBITDA margin for 2022 came to 36 per cent, a gain on the 35 per cent a year before and ‘one of the highest amongst industry peers’.

EGA’s working capital end 2022 was 30 days – itself a ‘significant improvement on previous years and one of the best in the industry’.

‘Freeing’ up $1b

According to Zouhir Regragui, Chief Financial Officer of EGA, “These results show EGA’s industry-leading capability both to capitalise on market opportunity and to generate value from mining to metal during more challenging periods. This is testament to the success of our multi-year transformation programme that has so far delivered some $1.7 billion in additional EBITDA over three years.

“Over the past four years, we have improved our working capital and have released close to $1 billion previously trapped in the business.”

EGA’s average realised London Metal Exchange (LME) price for its metal was $2,715 per tonne. (The benchmark LME daily price reached a decade-high in March of $3,985 per tonne, before retreating to a low of $2,080 in September.)

EGA hit record production at 'every step of the aluminium value chain from mining to cast metal'. These were made up of: 

  1. EGA’s hot metal production was at 2.65 million tonnes. (During 2022, EGA passed 40 million tonnes of hot metal produced since the start-up of Jebel Ali facility in 1979.)
  2. EGA cast the hot metal into a record 2.73 million tonnes of finished products. Value-added products - or ‘premium aluminium’ - was 78% of sales, with volume increasing slightly from 2021.
  3. The Al Taweelah alumina refinery produced 2.43 million tonnes of alumina, up 5% and meeting 47% of EGA’s total alumina needs, and making an Dh919 million ($250 million) contribution to EGA adjusted EBITDA.

Steady on ’23 growth

“We expect global demand for aluminium to grow by between 1- and 2 per cent in 2023 - and much more over the decades ahead in the transition to a more sustainable economy,” the CFO added. “The bulk of new demand will be in secondary and low-carbon primary aluminium, for which there will be a premium. We are growing our business in both these areas.”