EGA had an exceptional 2022 performance run. The latest numbers show UAE industrial company has built in ample resilience to a market turn. Image Credit: Supplied

Dubai: The UAE’s biggest industrial powerhouse outside of the energy sector, EGA, pulled in net profits of Dh2 billion for the first-half of 2023, a period during which market conditions have been ‘moderate’.

The total compares with Dh5.6 billion in net profit delivered during H1-22, when the global commodity cycle was still at its peak. Emirates Global Aluminium’s H1-23 revenue came to Dh14.8 billion, a drop from the Dh18.3 billion a year ago.

"We aim to achieve performance that is competitive for our sector throughout the economic cycle," said Abdulnasser Bin Kalban, CEO. "In the first-half of 2023 that is what we did - delivering solid financial results as market conditions moderated from the significant volatility of recent years, a testament to our resilience and strategic approach."

Sales to UAE customers made up 148,000 tonnes, or 11 per cent, of total metal sales. The local industrial and project sectors have been recording sizeable activity, with market watchers projecting a strong second-half. This could translate into higher demand for EGA products down the line.

The EGA CEO is factoring in demand sustaining itself through the latter half of the year. 

I am confident we will continue to be competitive, as we benefit from our multi-year drive to maximise our revenue and minimise our costs, our focus on operational excellence, and our partnerships with our global customers.

- Abdulnasser Bin Kalban
Paying off debts early
EGA made a corporate debt pre-payment of Dh2.9 billion ($800 million) in H1-23.
The company has now pre-paid Dh9.4 billion ($2.6 billion) since mid-2021. EGA’s corporate debt that needs to be paid off is currently at Dh14.4 billion. The net debt to adjusted EBITDA ratio was 1.6x at the end of June 2023.

Off its peak

The firm's average realised London Metal Exchange price for its aluminium was $2,359 per tonne compared to $3,063 per tonne during H1-22 and $2,392 during H2-22.

EGA’s aluminium segment recorded an adjusted EBITDA margin of 27 per cent and 'continuing to lead global industry peers'.

"In the exceptional market conditions of the first-half of 2022, EGA’s adjusted EBITDA margin was 41 per cent,"  said a statement, while H2-22's was 28 per cent.

"Over the longer term, we see considerable opportunities both to grow our primary production and to develop our business in recycling," said Zouhir Regragui, Chief Financial Officer of Emirates Global Aluminium. 

We are well-placed within our sector to capitalise on these opportunities due to our track record in strategic expansion, our operational expertise, and our financial strength.

- Zouhir Regragui of Emirates Global Aluminium
EGA tweaks its sales push
Sales of EGA's value-added products - or ‘premium aluminium’ - was down 5% to 1.02 million tonnes during the first-half. Premium aluminium accounted for 77% of total sales against 82% in H1-2022 'amid lower demand for extrusion billets'.
"EGA focused on optimising EBITDA contribution from sales through opportunistic non-VAP metal sales into global markets at strong premiums while maintaining or growing relative market share in ‘premium aluminium’ in key markets and segments," said a statement.