The global aluminum market was coming off a strong 2022 performance, and which meant realised prices came in lower last year. EGA expects a strong rebound in demand and prices in the short-term. Image Credit: Supplied

Dubai: Revenues for Emirates Global Aluminium (EGA), the UAE’s biggest manufacturing entity outside of the energy sector, had revenues of Dh29.5 billion for 2023, while net profit came to Dh3.4 billion. This compares with a top-line number of Dh34.6 billion in 2022, while profit that year was Dh7.4 billion.

The company attributes this to the lower global benchmark price that aluminium was fetching during 2023. This was offset by increased production and sales volume, according to EGA.

The average realised London Metal Exchange price for EGA’s metal was $2,264 per tonne, against $2,715 per tonne in 2022.

Dividend remains same

EGA maintained the dividend pay at Dh3.7 billion for 2023.

Despite the global aluminium market retreating from the record highs of 2022, EGA’s adjusted Earnings Before Interest, Tax, Depreciation and Amortisation (adjusted EBITDA) for 2023 were Dh7.7 billion ($2.1 billion). 

Cash generated from operating activities closed 2023 at Dh7.9 billion, compared to Dh12.7 billion from 2022.

“In 2023, EGA again delivered strong performance in what we control – the safety of our people, operational excellence, our costs, and our long-term commercial relationships with our global customers,” said Abdulnasser Bin Kalban, CEO. “This enabled us to continue to deliver competitive financial results compared to our global peers, and record-equalling dividends for our shareholders.

“We believe the outlook for aluminium in the long term is very positive, because our metal is an essential material for the development of a more sustainable society.

“Global aluminium demand is expected to grow significantly over the coming decades, particularly for low carbon and recycled metal. EGA is well set to capitalise on these growth opportunities and further strengthen our position in the global aluminium industry.”

"Global aluminium prices were lower than in 2022, amid a less robust economy. However, prices remained higher than historic annual averages for the eight years before the pandemic."

Our view is the global aluminium market will grow from 95 million tonnes to 140 million by 2040 – it’s a critical material for the global economy and there will always be a strong tailwind behind it

- Abdulnasser Bin Kalban of Emirates Global Aluminium

A 'retreat' from 2022 price levels

The global aluminium market had retreated from the ‘record highs of 2022’. Despite this, the EGA’’s adjusted Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for 2023 was Dh7.7 billion.

Some sort of price softening for the commodity was always in the works after the 2021-22 spike. EGA on its part was deploying high production right through 2023. The move seems to be paying off as its EBITDA margin - at 25 per cent - remains pegged higher than the industry average.

EGA’s total metal sales in 2023 were at a 'record' 2.75 million tonnes (2022: 2.72 million tonnes). Of this, 76 per cent were value-added products (78 per cent in 2022). EGA supplied some 423 customers in over 50 countries during the year. Also last year, the EGA Board of Directors approved the construction of the UAE’s largest aluminium recycling plant in Al Taweelah.

We have maintained our resilience through the Red Sea issue. It could also give us competitive advantages in delivering to our customers in Europe on time compared to the competition.

- Ziad Fares of Emirates Global Aluminium

“Over the past four years we have transformed our business, delivering $2.4 billion in cost and revenue improvements," said Ziad Fares, acting Chief Financial Officer of Emirates Global Aluminium. "Over the same period, we reduced our total debt burden by $3.3 billion while delivering healthy dividends to our shareholders."

Cutting down debt
In 2023, EGA pre-paid Dh2.9 billion of debt apart from making scheduled repayments at Guinea Alumina Corporation. Total debt as at end-2023 was at Dh16.6 billion, which works out to a net debt to adjusted EBITDA ratio of 1.8 times and compared to Dh19.7 billion at end 2022.