28
February
2022
|
09:04
Europe/Amsterdam

EGA delivers record EBITDA of $2.5 billion and net profit up 1,140% to $1.5 billion for 2021 with strong market for metal, solid operational performance throughout value chain, and focus on efficiency

Abdulnasser Bin Kalban, 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.

“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.”

Financial highlights of 2021

  • Revenue of AED 25.5 billion ($6.9 billion), compared to AED 18.7 billion ($5.1 billion) in 2020.
  • Adjusted EBITDA of AED 9.0 billion ($2.5 billion), more than double AED 4.1 billion ($1.1 billion) in 2020. Average realised LME price of $2,382 per tonne, with value-added products accounting for 84 per cent of cast metal sales and attracting higher premiums than commodity metal.
  • Net profit of AED 5.5 billion ($1.5 billion), an increase of 1,140 per cent compared to AED 445 million ($121 million) in 2020.
  • Cash generated from operating activities of AED 7.5 billion ($2.0 billion) compared to AED 5.5 billion ($1.5 billion) in 2020.
  • EBITDA margin of 35 per cent, compared to 22 per cent in 2020, one of the highest amongst industry peers.
  • Significant deleveraging and capital structure optimisation to enable future dividend payments for shareholders and business growth. Senior corporate debt facility reduced in size by AED 2.7 billion ($730 million) to AED 20.3 billion ($5.5 billion), scheduled and then full early repayment of AED 1.6 billion ($446 million) project financing for construction of Al Taweelah smelter, and scheduled repayments of the GAC debt. In total, EGA has repaid AED 4.4 billion ($1.2 billion) of debt in 2021. EGA’s net debt to adjusted EBITDA ratio stands at 2.4x.
  • EGA’s shareholders received AED 735 million ($200 million) in dividends in 2021. Additionally, the H-block was acquired from the shareholders for AED 1.6 billion ($438 million) in December 2021.

Operational highlights of 2021

  • Lost Time Injury Frequency Rate of 0.11 per million hours worked, and Total Recordable Injury Frequency Rate (a measure of all incidents including those not requiring time of work) of 1.1 per million hours worked, both significantly better than industry benchmarks. During 2021, EGA continued its focus on the prevention of COVID-19, with over 330,000 PCR tests administered and employees and contractors voluntarily receiving some 22,951 doses of vaccination on EGA sites.
  • Sales of 2.54 million tonnes of cast metal (2020: 2.52 million tonnes), with progress in debottlenecking and completion of expansion offset by maintenance shutdowns and global logistics constraints.
  • EGA commissioned 66 new reduction cells at Al Taweelah smelter adding some 78 thousand tonnes of hot metal production capacity.
  • H-block power plant at Jebel Ali, built around the most efficient natural gas turbine in the UAE, commissioned.
  • EGA became the first company in the world to produce aluminium commercially using the power of the sun. Production of CelestiAL solar aluminium totalled almost 39 thousand tonnes in 2021.
  • Sales to local UAE customers of 281 thousand tonnes of cast metal (2020: 252 thousand tonnes), further growing EGA’s contribution to the UAE economy in line with target to double absolute economic impact by 2040.
  • Al Taweelah alumina refinery exceeded its nameplate capacity by almost 15 per cent, delivering 2.3 million tonnes of alumina to EGA’s smelters and making an AED 830 million ($226 million) contribution to EGA adjusted EBITDA.
  • Exports of 12 million wet tonnes of bauxite from Guinea Alumina Corporation, up 2.3 million tonnes on 2020, contributing AED 340 million ($92 million) to EGA’s adjusted EBITDA.

United Arab Emirates, 28 February 2022: Emirates Global Aluminium, the world’s largest ‘premium aluminium’ producer and the biggest industrial company in the United Arab Emirates outside oil and gas, today reported record adjusted Earnings Before Interest, Tax, Depreciation and Amortisation (adjusted EBITDA) and net profit for 2021.

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. Net profit was AED 5.5 billion ($1.5 billion), an increase of 1,140 per cent compared to AED 445 million ($121 million) in 2020.

EGA’s strongest-ever results were due to a 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.

EGA’s average realised London Metal Exchange aluminium price for 2021 was $2,382 per tonne.

Revenue in 2021 was AED 25.5 billion ($6.9 billion), compared to AED 18.7 billion ($5.1 billion) in 2020.

EGA’s proportion of sales accounted for by value-added products or ‘premium aluminium’ rose to 84 per cent of total sales, close to an all-time record, compared to 72 per cent 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 continued to be the largest producer by volume.

EGA significantly deleveraged during 2021 and optimised its capital structure, enabling enhanced future dividend payments to shareholders and creating financial flexibility for future growth. EGA reduced 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. In total, EGA repaid AED 4.4 billion ($1.2 billion) of debt in 2021. EGA’s net debt to adjusted EBITDA ratio stood at 2.4x at the end of the year.

EGA’s shareholders received AED 735 million ($200 million) in dividends in 2021. Additionally, JA Power & Water Co, which owns the highly-efficient H-block power plant at Jebel Ali, was acquired from the shareholders for AED 1.6 billion ($438 million) in December 2021.

EGA’s EBITDA margin was 35 per cent (2020: 22 per cent), one of the highest amongst industry peers.

Favourable benchmark London Metal Exchange prices for aluminium, ramp-ups at Al Taweelah alumina refinery and Guinea Alumina Corporation, and cost improvements contributed to an increase in cash generated from operating activities, which was AED 7.5 billion ($2.0 billion) compared to AED 5.5 billion ($1.5 billion) in 2020.

Early in 2021, in a significant step towards broader decarbonisation, EGA became the first company in the world to produce aluminium commercially using the power of the sun through a partnership with Dubai Electricity & Water Authority. Production of CelestiAL solar aluminium was almost 39 thousand tonnes during 2021, with all production supplied to BMW Group.

Abdulnasser Bin Kalban, 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.

“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, 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.”

Total sales of cast metal rose slightly to 2.54 million tonnes, as progress in debottlenecking and the completion of an expansion in Al Taweelah was offset by maintenance shutdowns and global logistics constraints.

EGA delivered record production at both the company’s upstream projects, in only their second full year after start-up.

Al Taweelah alumina refinery exceeded its nameplate capacity by 15 per cent, delivering some 2.3 million tonnes of alumina to EGA’s aluminium smelters in a world-class performance, making an AED 830 million ($226 million) contribution to EGA adjusted EBITDA.

Exports of bauxite ore from Guinea Alumina Corporation totalled 12 million wet metric tonnes, an increase of 2.3 million tonnes in 2020 and contributing AED 340 million ($92 million) to EGA’s adjusted EBITDA. GAC’s production, which is mostly shipped to external customers, made EGA one of the largest merchant bauxite suppliers in the world.

EGA commissioned 66 new reduction cells at Al Taweelah smelter in phases as planned during 2021, adding 78 thousand tonnes of hot metal production capacity.

Local sales to downstream customers in the UAE were 281 thousand tonnes, compared to 252 thousand tonnes in 2020, further growing EGA’s contribution to the UAE economy in line with target to double absolute economic impact by 2040.

EGA’s Lost Time Injury Frequency Rate in 2021 was 0.11 per million hours worked. The Total Recordable Injury Frequency Rate (a measure of all incidents including those not requiring time of work), was 1.1 per million hours worked. Both were significantly better than industry benchmarks. EGA’s goal is zero harm.

During 2021, EGA continued extensive, proactive measures to control and manage COVID-19 on the company’s sites. Over 330,000 PCR tests were administered at EGA. Employees and contractors elected to receive some 22,951 doses of COVID-19 vaccination at EGA. There have been no production interruptions at EGA due to COVID-19 since the start of the global pandemic.