EGA marks competitive performance in H1 2023 amidst moderate market conditions

Emirates Global Aluminium (EGA), the world's largest producer of premium aluminium and the biggest industrial company in the United Arab Emirates reports competitive financial performance for the aluminium sector in H1 2023. Despite market conditions moderating, EGA's adjusted EBITDA was AED 4.2 billion ($1.1 billion), with a net profit of AED 2.0 billion ($533 million). EGA's aluminium segment adjusted EBITDA margin was 27%, continuing to lead global industry stalwarts.

EGA's average realised London Metal Exchange price for its aluminium was $2,359 per tonne, which was lower than H1 2022's $3,063 per tonne but higher than H2 2022's $2,392 per tonne. The company made a corporate debt pre-payment of AED 2.9 billion ($800 million) during H1 2023, continuing its deleveraging strategy to strengthen its balance sheet for future growth. EGA has now pre-paid AED 9.4 billion ($2.6 billion) in total since mid-2021, and its outstanding corporate debt is currently AED 14.4 billion ($3.9 billion).

Abdulnasser Bin Kalban, Chief Executive Officer of Emirates Global Aluminium, commented: "At EGA, we aim to achieve performance that is competitive for our sector throughout the economic cycle, in the first half of 2023, that is what we did - delivering solid financial results even as market conditions moderated from the significant volatility of recent years, a testament to our resilience and strategic approach." 

"I am confident we will continue to be competitive in the second half, as we benefit from our multi-year drive to maximise our revenue and minimise our costs, our focus on operational excellence, and our partnerships with our global customers," he added. 

Zouhir Regragui, Chief Financial Officer of Emirates Global Aluminium, exclaimed: "Our continuing performance, recurring cost savings from our multi-year Najah transformation programme, and strong cash generation have enabled us to further optimise our balance sheet for future growth. Over the longer term, we see considerable opportunities both to grow our primary production and to develop our business in recycling. We are well-placed within our sector to capitalise on these opportunities due to our track record in strategic expansion, our operational expertise, and our financial strength."

EGA's production rates at each step of the aluminium value chain were either in line with or slightly ahead of the production in H1 2022 but lower than the record performance in H2 2022 due to seasonality and planned maintenance shutdowns. EGA sold 1.32 million tonnes of cast metal, a 1% increase from H1 2022's 1.31 million tonnes. EGA supplied 383 customers around the world during the first half of 2023.

Sales of value-added products or premium aluminium accounted for 77% of total sales, compared to 82% in H1 2022 and 75% in H2 2022. Sales of premium aluminium decreased by 5% to 1.02 million tonnes from 1.07 million tonnes in H1 2022 and 1.06 million tonnes in H2 2022, amid lower demand for extrusion billets. EGA focused on optimising EBITDA contribution from sales through opportunistic non-VAP metal sales into global markets at strong premiums while maintaining or growing relative market share in premium aluminium in key markets and segments.

Metal sales to local customers increased to 148 thousand tonnes, or 11% of total sales, reflecting the relatively strong performance of the UAE economy. In H1 2022, local sales were 141 thousand tonnes, and in H2 2022, local sales were 127 thousand tonnes. EGA's net debt to adjusted EBITDA ratio was 1.6x at the end of June 2023.