Emirates Global Aluminium PJSC, the Middle East’s biggest producer of the metal, posted a record profit in the first half of the year as prices soared along with those of other commodities.
The company, whose United Arab Emirates-based shareholders are considering an initial public offering, generated income of AED1.74 billion ($473 million), after a loss of $57m a year earlier. Core earnings were $950m.
“The long-term outlook for the aluminium market is good,” said chief executive officer Abdulnasser bin Kalban. “I am confident that our performance will continue to improve, making EGA increasingly attractive should our shareholders decide to proceed with an IPO, which would be one of the UAE’s largest ever.”
Metal sales declined at 1.18 million tonnes, compared to 1.25 million tonnes in H2 2020 and 1.27 million tonnes in H1 2020.
“Although our financial performance in the first half of 2021 was EGA’s best ever, we could have done even better. Our metal production was slightly lower, and we are upgrading our carbon plants and debottlenecking elsewhere to return to metal output growth,” said bin Kalban.
“Like many other industrial companies, we were affected by global logistics challenges including container availability, and we are adopting different approaches in response such as break-bulk shipping.”
Cash generated from operating activities reached AED2.89bn ($787m) compared to AED3.45bn ($938m) in H2 2020 and AED2.03bn ($553m) in H1 2020, mainly due to an increase in working capital.
Revenue peaked at AED10.8bn ($2.94bn) compared to AED9.0bn ($2.46bn) in H1 2020.
“In these buoyant market conditions, EGA is highly cash-generative, enabling us to further strengthen our balance sheet by deleveraging the company and preparing us for the next stage in our corporate development,” said Zouhir Regragui, chief financial officer of EGA.
Since the end of the first half of 2021, EGA has successfully refinanced $5.5bn in corporate debt, deleveraging by $1bn and improving repayment terms to reduce costs and enable an optimal dividend policy in future years for shareholders.
The new facility, which is a senior unsecured loan, reprofiles EGA’s scheduled debt repayments and extends them by 2.5 years.Some 22 local, regional and international banks participated in the transaction.
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