GCC’s largest aluminium producer ‘Emirates Global Aluminium’ books record profit of $1.5 billion for 2021

The largest primary aluminium in the GCC region and the biggest non-oil industrial entity of UAE, Emirates Global Aluminium (EGA) booked a record whopping 1,140% rise in net profits for 2021 to $1.5 billion. The company earning depicts a bulls-eye of sharp turn following the disruptions rooted in the COVID-19 pandemic in 2020.

The adjusted EBITDA more than doubled to AED 9.0 billion ($2.5 billion) for 2021, from AED 4.1 billion ($1.1 billion) for 2020. However, net profit was AED 5.5 billion ($1.5 billion), an increase of 1,140% compared to AED 445 million ($121 million) in 2020.

EGA’s delivered the strongest-ever results and accredits it to the strong global market for aluminium as economies recovered from COVID-19, solid operational performance throughout the value chain, and a focus on efficiency improvements throughout the company. Production and sales of every commodity in the value chain increased in 2021 compared to 2020.

Abdulnasser Bin Kalban, the Chief Executive Officer of EGA, said, “These record results show that our preparations for the next stage of our corporate journey are nearing completion. EGA today has strength from mine to metal, an optimised capital structure to continue delivering significant dividends to shareholders in future and grow our business, and a path to greatly reducing our carbon footprint.”

“In the shorter term, strong demand has continued in the first quarter of 2022. While like others we are still facing challenges with global logistics, we have adopted new approaches such as breakbulk shipping to overcome them”, the CEO added.

“EGA can still do better. We will focus on maximising the value of our existing assets by debottlenecking and through Industry 4.0. We will drive further efficiency, and we will focus on unlocking further growth for our business.”

Zouhir Regragui, the Chief Financial Officer of EGA said, “Higher prices for aluminium have prevailed since the world started rebounding from COVID-19, and this demonstrates the strong long-term outlook for our metal as a key material for the development of a more sustainable future. We will take more bold steps to strengthen our own sustainability.

“Our deleveraging trajectory remains very strong, driven by both market conditions and our own efforts to improve EBITDA. As a result, EGA is increasingly well-set for the next phase of our growth journey.”

The proportion of sales accounted for by value-added products or ‘premium aluminium’ by EGA grew to 84% of total sales, which is close to a record, compared to 72% in 2020. Value-added products attract higher premiums over benchmark prices than those achieved by standard aluminium and enable EGA to maximise the value of its primary aluminium production. In 2021 EGA pursued to be the largest producer by volume.

The aluminium manufacturer narrowed its senior corporate debt facility by AED 2.7 billion ($730 million) to AED 20.3 billion ($5.5 billion), made scheduled and then full early repayment of the outstanding AED 1.6 billion ($446 million) project financing for the construction of Al Taweelah smelter, and made scheduled repayments on Guinea Alumina Corporation debt. Collectively, EGA repaid AED 4.4 billion ($1.2 billion) of debt in 2021 and its net debt to adjusted EBITDA ratio stood at 2.4x at the end of the year.