Emirates Global Aluminium, the UAE’s largest industrial company outside the oil and gas sector, registered record half-yearly earnings, with profit up more than threefold as rising sales drove revenue.
EGA’s adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) surged to Dh7.6 billion ($2.1bn) in the six months to the end of June, more than doubling from Dh3.5bn in the same period a year earlier, the company said on Tuesday.
Net profit for the first six months of the year climbed to Dh5.9bn, from Dh1.7bn at the end of June 2021.
Revenue for the reporting period rose to Dh18.3bn, a jump of about 70 per cent from a year earlier.
“After our record performance in 2021, I noted that EGA could still do better and, indeed, we improved our operational performance throughout the value chain — from mining to outbound logistics for finished metal,” chief executive Abdulnasser bin Kalban said.
“This enabled us to capitalise on strong market conditions. Our net profit for the first half exceeded [the] net profit for the entirety of last year.”
Prices of commodities, including aluminium, rose sharply last year and the momentum continued in 2022. Russia's military invasion in Ukraine further drove prices higher, with aluminium hitting a decade-high in March.
Prices, which climbed 42 per cent in 2021, rose to $3,741 a tonne on the London Metal Exchange earlier this year. They have since come down to $2,390.50 a tonne.
However, EGA’s average realised price for the half-year period stood at $3,063 a tonne, the company said.
Although prices have come off from their first-quarter highs amid rising inflation and slowing economic growth, EGA said it remained focused on improving operational performance and efficiency to boost profitability.
“During the first half, we worked to debottleneck our operations, optimise our customer and product mix to maximise our revenue, robustly control our costs and set the course for future growth,” Mr bin Kalban said.
“We will continue to focus on delivering competitive returns for our sector, however the global aluminium market develops.”
The company's ebitda margin for the aluminium segment rose to 41 per cent at the end of June, from 32 per cent at the end of the first half of last year, one of the best among its global peers.
EGA’s sales of cast metal increased by 11 per cent to 1.31 million tonnes, up from 1.18 million tonnes in the first half of 2021, as the company enforced its production requirement plans and took steps to mitigate the effects of global logistics challenges.
The company currently has more than 400 customers across 50 countries.
Sales of value-added products, or “premium aluminium”, grew 5 per cent to 1.07 million tonnes, from 1.02 million tonnes in the first six months of last year.
Premium aluminium accounted for 82 per cent of total metal sales, with the company focusing on optimising its ebitda contribution from sales amid the high price volatility of alloy metals.
The company boosted production at its Al Taweelah alumina refinery to 1.15 million tonnes, sourcing about 45 per cent of its total alumina needs from its own factory during the period.
Exports of bauxite ore from operations in Guinea increased 11 per cent to 6.49 million tonnes in the January-June period.
EGA, which is jointly owned by Abu Dhabi’s strategic investment arm, Mubadala Investment Company, and the Investment Corporation of Dubai, said it paid $600 million in interim dividends to its shareholders.
The company significantly deleveraged its balance sheet this year and made a corporate debt prepayment of Dh2.9bn. Since January 2021, EGA has prepaid Dh6.5bn in total while making Dh968m in scheduled payments.
Its outstanding corporate debt currently stands at Dh17.4bn. The company's subsidiary, Guinea Alumina Corporation, has an outstanding project financing facility of Dh2.4bn.
“As you would expect, we were highly cash generative, so this enabled us to do two things … one to deliver exceptional returns to our shareholders … [and] continue our deleveraging, and to strengthen our balance sheet to prepare us for the next stage in our corporate journey,” EGA chief financial officer Zouhir Regragui told The National.
Despite the record half-yearly earnings, EGA sounded a note of caution and Mr Regraqui said the company expected this year to be “the story of two halves”, given the uncertain economic outlook.
“Prices have already come down, so we don't expect the same level of prices in the second half,” he said.
EGA is also closely following developments in China, which is “important for our industry”, particularly how the world's second-biggest economy manages the pandemic and “exits the zero-Covid policy”, he said.
In terms of demand, EGA has experienced “some cooling off from the highs” but there is “nothing alarming”, he said.
Mr bin Kalban said the company's focus remained on “more sustainable” growth and that EGA was in a “good position for any challenges in the future”.
“At the moment, nothing is [making] me lose my sleep,” he said.
In June, Mr bin Kalban disclosed that EGA was planning to manufacture silicon metal, a key raw material used in the production of premium aluminium locally, and that the construction of the plant could begin “as soon as next year”.
The project and plans to set up an aluminium recycling plant in the UAE are at the feasibility stage and would be great for the long-term sustainability of the company, he said on Tuesday.
What is dialysis?
Dialysis is a way of cleaning your blood when your kidneys fail and can no longer do the job.
It gets rid of your body's wastes, extra salt and water, and helps to control your blood pressure. The main cause of kidney failure is diabetes and hypertension.
There are two kinds of dialysis — haemodialysis and peritoneal.
In haemodialysis, blood is pumped out of your body to an artificial kidney machine that filter your blood and returns it to your body by tubes.
In peritoneal dialysis, the inside lining of your own belly acts as a natural filter. Wastes are taken out by means of a cleansing fluid which is washed in and out of your belly in cycles.
It isn’t an option for everyone but if eligible, can be done at home by the patient or caregiver. This, as opposed to home haemodialysis, is covered by insurance in the UAE.
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Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
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The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
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Other ways to buy used products in the UAE
UAE insurance firm Al Wathba National Insurance Company (AWNIC) last year launched an e-commerce website with a facility enabling users to buy car wrecks.
Bidders and potential buyers register on the online salvage car auction portal to view vehicles, review condition reports, or arrange physical surveys, and then start bidding for motors they plan to restore or harvest for parts.
Physical salvage car auctions are a common method for insurers around the world to move on heavily damaged vehicles, but AWNIC is one of the few UAE insurers to offer such services online.
For cars and less sizeable items such as bicycles and furniture, Dubizzle is arguably the best-known marketplace for pre-loved.
Founded in 2005, in recent years it has been joined by a plethora of Facebook community pages for shifting used goods, including Abu Dhabi Marketplace, Flea Market UAE and Arabian Ranches Souq Market while sites such as The Luxury Closet and Riot deal largely in second-hand fashion.
At the high-end of the pre-used spectrum, resellers such as Timepiece360.ae, WatchBox Middle East and Watches Market Dubai deal in authenticated second-hand luxury timepieces from brands such as Rolex, Hublot and Tag Heuer, with a warranty.
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Cartlow: $13.4m
Rabbitmart: $14m
Smileneo: $5.8m
Soum: $4m
imVentures: $100m
Plug and Play: $25m
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
MATCH INFO
Champions League quarter-final, first leg
Tottenham Hotspur v Manchester City, Tuesday, 11pm (UAE)
Matches can be watched on BeIN Sports
Five expert hiking tips
Always check the weather forecast before setting off
Make sure you have plenty of water
Set off early to avoid sudden weather changes in the afternoon
Wear appropriate clothing and footwear
Take your litter home with you
Another way to earn air miles
In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.
An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.
“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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The Old Slave and the Mastiff
Patrick Chamoiseau
Translated from the French and Creole by Linda Coverdale
The biog
Name: Abeer Al Shahi
Emirate: Sharjah – Khor Fakkan
Education: Master’s degree in special education, preparing for a PhD in philosophy.
Favourite activities: Bungee jumping
Favourite quote: “My people and I will not settle for anything less than first place” – Sheikh Mohammed bin Rashid.
AWARDS
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UAE currency: the story behind the money in your pockets
Honeymoonish
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Cricket World Cup League 2
UAE squad
Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind
Fixtures
Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE
