WAM: Emirates Global Aluminium (EGA) on Tuesday reported its best ever half-year earnings as strong operational performance throughout the value chain enabled the company to capitalise on favourable market conditions. EGA’s net profit for the first half of 2022 exceeded net profit for the entirety of 2021, itself a record year for the company.
The company’s net profit was AED5.9 billion, compared to AED1.7 billion in H1 2021.
EGA’s adjusted Earnings Before Interest, Taxes, Depreciation, and Amortisation (adjusted EBITDA) was a record AED7.6 billion in the first half of 2022, compared to AED3.5 billion, in the same period last year.
Sales of cast metal increased by 11 percent to 1.31 million tonnes, compared to 1.18 million tonnes in the first half of 2021.
EGA implemented production creep plans and mitigation measures for global logistics challenges. It supplied more than 400 customers with metal in over 50 countries.
Sales of value-added products or ‘premium aluminium’ increased five percent to 1.07 million tonnes from 1.02 million tonnes in H1 2021.
Premium aluminium accounted for 82 percent of total metal sales, compared to 86 percent in H1 2021, with the company focusing on optimising EBITDA contribution from sales amid the high volatility of alloy metal prices.
EGA’s aluminium segment EBITDA margin was 41 percent, compared to 32 percent in H1 2021, leading major global peers.
Al Taweelah alumina refinery’s production increased to 1.15 million tonnes of alumina from 1.09 million tonnes in H1 2021, despite a planned maintenance shutdown. EGA sourced around 45 percent of the company’s total alumina needs from its own alumina refinery during the period.
Exports of bauxite ore from Guinea increased 11 percent to 6.49 million tonnes from 5.85 million tonnes in H1 2021.
Aluminium prices reached a decade-high during the first half of 2022. While the benchmark London Metal Exchange price declined later in the period, EGA’s average realised price for the half-year was $3,063 per tonne.
Abdulnasser bin Kalban, Chief Executive Officer of EGA, said, “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. This enabled us to capitalise on strong market conditions. Our net profit for the first half exceeded net profit for the entirety of last year.
“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. We will continue to focus on delivering competitive returns for our sector, however, the global aluminium market develops.”
Zouhir Regragui, Chief Financial Officer of EGA, said, “Our success meant we were highly cash-generative in strong market conditions, enabling us to deliver exceptional returns to our shareholders with an interim dividend of $600 million and continue to strengthen our balance sheet for the next stage in our corporate journey.
After the end of the first half of 2022, EGA made an AED2.9 billion corporate debt pre-payment. Since January 2021, EGA has pre-paid AED6.5 billion in total while making AED968 million in scheduled payments.
After the end of the half-year, EGA paid an interim dividend of AED2.2 billion to shareholders.
EGA supplied 141 thousand tonnes of metal to UAE customers, enabling the continuing success of one of the UAE’s most important industrial sectors and a champion of “Make it in the Emirates” producing everything from car parts to window frames for local use and global export. This was 11 percent of total metal sales.