Abdulnasser Bin Kalban, Chief Executive Officer of Emirates Global Aluminium: “After our record performance in 2021, I noted that EGA could still do better and indeed we improved our operational performance across 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.” 

Financial highlights of H1 2022

·         Adjusted EBITDA of AED 7.6 billion ($2.1 billion), compared to AED 3.5 billion ($950 million) in H1 2021.

·         Net profit of AED 5.9 billion ($1.6 billion), compared to AED 1.7 billion ($473 million) in H1 2021. EGA’s first half 2022 net profit exceeded net profit for the entirety of 2021 (AED 5.5 billion, $1.5 billion) itself a record year for the company.

·         Aluminium segment EBITDA margin of 41 per cent, compared to 32 per cent in H1 2021, leading major global peers.

·         Revenue of AED 18.3 billion ($5 billion) compared to AED 10.8 billion ($2.9 billion) in H1 2021.

·         After the end of the first half of 2022, EGA made an AED 2.9 billion ($800 million) corporate debt pre-payment, continuing deleveraging to strengthen the company’s balance sheet for EGA’s future corporate journey. Since January 2021, EGA has pre-paid AED 6.5 billion ($1.8 billion) in total. EGA’s outstanding corporate debt currently stands at AED 17.4 billion ($4.7 billion), while GAC has outstanding project financing of AED 2.4 billion ($662 million).  EGA’s net debt to adjusted EBITDA ratio is 1.2x.

·         After the end of the half, EGA paid an interim dividend of AED 2.2 billion ($600 million) to shareholders.

Operational highlights of H1 2022

·         Lost Time Injury Frequency Rate of 0.3 per million hours worked, with three injuries leading to time off work. EGA’s Total Recordable Injury Frequency Rate (a measure of all incidents including those not requiring time of work) was 1.86 per million hours worked.

·         Sales of cast metal increased by 11 per cent to 1.31 million tonnes, compared to 1.18 million tonnes in the first half of 2021, as EGA implemented production creep plans and mitigation measures for global logistics challenges.

·         Sales of value-added products or ‘premium aluminium’ increased five per cent to 1.07 million tonnes from 1.02 million tonnes in H1 2021. ‘Premium aluminium’ accounted for 82 per cent of total sales, compared to 86 per cent in H1 2021, with the company focusing on optimising EBITDA contribution from sales amid high volatility of alloy metal prices.

·         Local UAE customers accounted for 141 thousand tonnes, or 11 per cent, of total metal sales. The aluminium sector with EGA at its heart is a pillar of the UAE economy and champion of Make it in the Emirates.

·         Alumina deliveries from Al Taweelah alumina refinery to EGA’s smelters increased by six per cent to 1.15 million tonnes compared to 1.09 million tonnes in H1 2021. Al Taweelah alumina refinery continued to creep production beyond nameplate capacity despite a planned maintenance shutdown.

·         Bauxite exports from Guinea increased by 11 per cent to 6.49 million tonnes, compared to 5.85 million tonnes in H1 2021.  

·         EGA, TAQA, Dubal Holding and EWEC announced a strategic initiative to expand clean energy development, progress power assets and generation optimisation, and decarbonise EGA’s aluminium production.

United Arab Emirates, 23 August 2022: Emirates Global Aluminium, the largest industrial company in the United Arab Emirates outside oil and gas and the biggest ‘premium aluminium’ producer in the world, today 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.

EGA’s adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation (adjusted EBITDA) was a record AED 7.6 billion ($2.1 billion) in the first half of 2022, compared to AED 3.5 billion, ($950 million) in the same period last year.

The company’s net profit was AED 5.9 billion ($1.6 billion), compared to AED 1.7 billion ($473 million) in H1 2021.

Sales of cast metal increased by 11 per cent to 1.31 million tonnes, compared 1.18 million tonnes in the first half of 2021, as EGA implemented production creep plans and mitigation measures for global logistics challenges. EGA supplied more than 400 customers with metal in over 50 countries.

Sales of value-added products or ‘premium aluminium’ increased five per cent to 1.07 million tonnes from 1.02 million tonnes in H1 2021. ‘Premium aluminium’ accounted for 82 per cent of total metal sales, compared to 86 per cent in H1 2021, with the company focusing on optimising EBITDA contribution from sales amid high volatility of alloy metal prices.

EGA’s aluminium segment EBITDA margin was 41 per cent, compared to 32 per cent 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 per cent of the company’s total alumina needs from its own alumina refinery during the period.

Exports of bauxite ore from Guinea increased 11 per cent 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.   

“Aluminium demand is closely correlated to the health of the global economy. The economic outlook for the remainder of the year is uncertain but market conditions are likely to be less favourable than in the first half. We will maintain our focus on what we control – operational excellence, maximising the value of our production through our marketing strategy, controlling our overheads, and closely managing our working capital - to continue to deliver excellent returns compared to our sector.”

After the end of the first half of 2022, EGA made an AED 2.9 billion ($800 million) corporate debt pre-payment. Since January 2021, EGA has pre-paid AED 6.5 billion ($1.8 billion) in total while making AED 968 million ($263 million) in scheduled payments.

EGA’s outstanding corporate debt currently stands at AED 17.4 billion ($4.7 billion). In addition EGA’s subsidiary Guinea Alumina Corporation has an outstanding project financing of AED 2.4 billion ($662million). EGA’s net debt to adjusted EBITDA ratio is 1.2x.

After the end of the half-year, EGA paid an interim dividend of AED 2.2 billion ($600 million) 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 per cent of total metal sales.

During the period, EGA announced a strategic initiative with Abu Dhabi National Energy Company PJSC (TAQA), Dubal Holding and Emirates Water and Electricity Company (EWEC) that would expand clean energy development, progress power assets and generation optimisation, and decarbonise EGA’s aluminium production.

Under the initiative, EGA intends to divest its captive gas-fired power assets and instead source electricity from the grid, including an increasing proportion of clean energy. Negotiations on the initiative are continuing, with regulatory approvals then required.

EGA achieved a technology milestone in H1 2022, successfully starting up the company’s proprietary DX+ Ultra technology with a modified lining at 500KA, the first time this amperage has been achieved in the Middle East.  In aluminium smelting, increasing amperage offers the potential to increase aluminium production, reducing the cost per tonne of building new reduction cells and improving the productivity of existing ones.

EGA, the first company in the UAE to license its core process technology internationally, signed technology cooperation agreements during the first half of 2022 with Aluminium Bahrain, Ma’aden and PT Indonesia Asahan Aluminium (INALUM).

EGA’s Lost Time Injury Frequency Ratio was 0.3 per million hours worked, up from 0.22 per million hours worked in the equivalent period of 2021 while still significantly better than industry benchmarks. There were three injuries leading to time off work at EGA in the first half of 2022. EGA’s Total Recordable Injury Frequency Rate (a measure of all incidents including those not requiring time of work) was 1.86 per million hours worked, compared to 1.17 in the first half of 2021.

EGA is focused on further improving safety by mitigating common hazards, including to hands and fingers, as well as through implementing new technology, such as wearable devices to prevent heat-related incidents and safety monitoring through artificial intelligence.