Emirates Global Aluminium's 2022 net profit rises 34% to record on revenue boost

Emirates Global Aluminium, the UAE’s largest industrial company outside the oil and gas sector, reported record 2022 profit as a sharp rise in production and sales drove revenue.

Net profit for 2022 climbed to Dh7.4 billion ($2 billion), up 34 per cent from Dh5.5 billion a year earlier, the company said on Tuesday.

EGA’s adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) surged 37 per cent on an annual basis to Dh12.4 billion at the end of last year.

Its adjusted ebitda margin of 36 per cent was one of the highest among industry peers globally, it said.

Revenue for the reporting period rose to Dh34.6 billion, a 36 per cent jump from a year earlier.

“At EGA, we delivered our best-ever results by focusing throughout the year on what we control — the safety of our people, operational excellence, our costs and our commercial relationships with our long-term global customers,” chief executive Abdulnasser bin Kalban said.

“Our performance demonstrated our resilience and strength at every step of the value chain.”

Prices of commodities, including aluminium, rose sharply last year, driven by Russia's military offensive in Ukraine.

Aluminium prices, that rose 21 per cent in 2021, hit decade-high values of $3,985 a tonne in March last year, before retreating to a low of $2,080 in September.

EGA’s said its average realised London Metal Exchange price in 2022 was $2,715 a tonne.

The immediate outlook for the aluminium market remains under “some pressure” due to its close correlation to the health of the global economy.

However, EGA will deliver another competitive performance in 2023, Mr bin Kalban said.

“The more difficult conditions in the second half of 2022 [are set] to continue into 2023, but I am confident that we will continue to deliver sector competitive results,” he said.

The long-term outlook for aluminium — as the key material for the development of a more sustainable society — is bright.

“There are great growth opportunities in our industry, particularly in low-carbon and secondary aluminium [segments],” Mr bin Kalban said.

“I'm pretty sure that we will make the most out of these opportunities.”

EGA expects global demand for aluminium to grow by 1 per cent to 2 per cent in 2023, and much more over the coming decades in the transition to a more greener economy, chief financial officer Zouhir Regragui said.

There will be a premium for the secondary and low-carbon aluminium in the market and “we are growing our business in both these areas”, he said.

EGA achieved record sales of cast metal of 2.72 million tonnes, up from 2.54 million tonnes recorded in 2021.

About 78 per cent of the company’s metal sales were value-added products. Sales to customers in the UAE stood at 268,000 tonnes of cast metal last year.

EGA also achieved record production last year, with bauxite exports from its Guinea mines up 16 per cent to 14 million wet tonnes.

EGA’s bauxite mining subsidiary, Guinea Alumina Corporation (GAC), contributed Dh507 million to overall adjusted ebitda.

The company also increased production at its Taweelah alumina refinery. It produced 2.43 million tonnes of alumina, a 5 per cent annual increase, that met 47 per cent of EGA’s needs.

EGA’s hot metal production also reached the highest annual level of 2.65 million tonnes last year. It has produced more than 40 million tonnes of hot metal since Jebel Ali production began in 1979.

EGA is jointly owned by Abu Dhabi’s strategic investment arm, Mubadala Investment Company, and the Investment Corporation of Dubai.

It paid shareholders dividends of Dh3.7 billion, consisting of an interim dividend of Dh2.2 billion in July and a further Dh1.5 billion, which makes it the largest payout for shareholders in the company’s history.

EGA’s Najah transformation programme, focused on cost efficiencies and revenue growth, has delivered cumulative ebitda savings of Dh6.2 billion since its launch in 2020.

“The programme continues to deliver sustainable recurring annual value, as well as tools and processes to capture additional opportunities,” Mr Zouhir said.

“We've unlocked over the past four years around $1 billion of cash that was trapped in the business.”

EGA recorded an impairment loss of Dh1.1 billion for its mining assets and related equipment at GAC, a prudent accounting measure reflecting the increased cost of capital and other market conditions in Guinea, it said.

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