Dubai: Sustained demand and relative stability on building material prices provided enough of a boost to Emirates Steel Arkan’s 2023 numbers, with an 18 per cent rise in net profit to Dh602 million. These came off a Dh8.9 billion revenue tally, though down on the Dh9.4 billion in 2022.
The ADX-listed company cites the ‘challenging and volatile global economic landscape and its impact on commodity prices’ as factors to watch out for.
UAE project activity helps
In 2023, though, the steel division provided the UAE firm with a Dh8.03 billion revenue base, and which returned a profit of Dh457 million. This, Emirates Steel Arkan says, was brought on by the launch of ‘value-added products for the domestic and international markets. And by the ‘growth in construction activities’ in the UAE. (In the final 3 months of 2023, the company saw higher rebar sales in the local market.)
As for the building materials division, its contribution to revenues was Dh871 million and a profit of Dh145 million. Clearly, the launching a new operating model with two ‘distinct’ business divisions has helped. “This strategic move aims to capitalize on the unique strengths of the two divisions,” said the company.
“As the largest steel and building materials company in the UAE, we remain confident in sustaining competitiveness, seizing growth opportunities, and delivering substantial value for our shareholders,” said Hamad Al Hammadi, Chairman, Emirates Steel Arkan, which is majority-owned by ADQ.
Debt cuts
Since the start of 2023, the Group reduced its net bank debt by 94 per cent - from Dh1.1 billion to Dh63 million, resulting in a net bank debt to EBITDA ratio of 0.05 by year-end.
"As we look to 2024, our strategic focus revolves around boosting output, reducing costs, and surpassing our production targets," said Saeed Ghumran Al Remeithi, Director and Group CEO, Emirates Steel Arkan. "With a robust financial position, reduced debt and a commitment to sustainability, we approach the future with confidence."
More to follow...
