Dubai: Abu Dhabi’s Emirates Steel Arkan built a second quarter net profit of Dh207 million against a (pre-merger) loss of Dh24 million last year. The Q2-2022 numbers also represent a 184 per cent increase on the Dh73 million net profit in the first quarter.
The company – the biggest publicly listed steel and buildings materials entity in the UAE – saw revenues weigh in with Dh2.57 billion in the April-June period.
‘Prudent’ raw material inventory management and enhanced production efficiency are behind the improving numbers, according to the company, created from merging Emirates Steel with Arkan Building Materials. Hamad Abdulla Mohamed AlShorafa Alhammadi, Chairman, said: “During the second quarter, the management continued the integration of Arkan and Emirates Steel, creating increased opportunities for growth and employment.
“The strength of the results reflects how the creation of a national steel and building materials champion is supporting the UAE’s efforts to bringing about further economic diversification by nurturing the growth of the nation’s industrial base and increasing the competitiveness of Emirati goods and services in global markets.”
The balance-sheet was further shored up by a reduction in bank borrowings, which ‘enhanced the Group’s net debt-to-equity ratio to 21 per cent at the end of June compared to 32 per cent at the end of December 2021’.
The measures the Group has taken in H1 to optimise its business will allow us to continue executing our strategy with increased confidence.
During the period, the Group put in place ‘prudent raw materials inventory management and maintained finished product volumes at low levels to take advantage of - and manage - the risks associated with increasing price volatility’.
Cautious on H2
Prospects in the coming months will be dictated by the shape of the global economy, which ‘remains uncertain for the remainder of the year amid China’s COVID-19 resurgence and economic slowdown, higher inflation worldwide and elevated energy prices’.
Saeed Ghumran Alremeithi, Group CEO, said: “An intensive marketing programme and prudent cost control during the quarter have also supported our profitability amid a backdrop of higher raw material prices. The enhanced strength of our financial position also allows us to pursue new product development opportunities.”
The organisational changes we have made and the new environmentally-friendly products we are introducing in the second-half will help us navigate market volatility with greater resilience
