Emirates Global Aluminium reports net income of $325m for 2018, a decrease of 64%
Emirates Global Aluminium, the largest industrial company in the UAE outside oil and gas, has reported net income of AED1.2 billion ($325 million) for 2018, a decrease of 64 percent.
The company, the world’s largest premium aluminium producer, said the decrease compared to 2017 was mainly due to higher raw material prices and despite record production amid challenging market conditions.
EGA’s revenue increased to AED23.5 billion in 2018, driven by higher sales volumes, higher benchmark price and product premiums and an increase in value-added product sales by 161,000 tonnes to a record 2.3 million tonnes, it said in a statement.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) stood at AED4.4 billion, a decrease of 35 percent, it added.
EGA said its exposure to raw material market prices will be reduced significantly once its alumina refinery in Abu Dhabi and bauxite mining project in the Republic of Guinea reach full production.
Al Taweelah alumina refinery is expected to meet some 40 percent of EGA’s alumina needs once fully ramped-up while the Guinea Alumina Corporation bauxite mining project is expected to produce 12 million tonnes per year of the ore from which aluminium is derived.
Both projects are set to begin production this year.
EGA said it achieved record cast metal production of 2.64 million tonnes in 2018, up from 2.60 million tonnes in 2017, adding that sales of value-added products were a record 87 per cent of total sales.
Value-added products, or ‘premium aluminium’, attract considerably higher premiums than those achieved by standard aluminium and enable EGA to maximise the value of its production.
EGA said just over 10 percent of its production was supplied to customers in the UAE, serving the needs of the UAE’s downstream fabrication sector.
Abdulla Kalban, EGA’s managing director and CEO, said: “The aluminium industry is going through a challenging period with higher prices for our raw materials and lower benchmark prices for finished metal. This is reflected in our financial performance for 2018, although EGA achieved record production and value-added product sales and continued our strong focus on cost control and operational efficiency.
“Our strategic upstream growth projects, which will significantly reduce our exposure to volatile raw material prices, are nearly complete and will both begin production this year.
“During 2018, two of our colleagues lost their lives in an industrial incident in Jebel Ali, which is unacceptable to everyone at EGA. We investigated this incident thoroughly and took strong action across our business to address all its root causes.”