UAE’s EGA posts $2bn in full-year net profit on higher prices

UAE’s Emirates Global Aluminium (EGA) said its annual net profit rose by 34 per cent to $2.8bn (Dhs7.4bn) in 2022, from $1.5bn in the previous year.

EGA, the Middle East’s biggest aluminium producer, said the average realised London Metal Exchange price for its metal was $2,715 per tonne. The benchmark LME daily price reached a decade-high in March of $3,985 per tonne, before retreating to a low of $2,080 last September.

The company’s revenue jumped by 36 per cent to Dhs34.6bn while cash generated from operating activities increased by 70 per cent to Dhs12.7bn.

“The immediate outlook for aluminium remains under pressure due to its close correlation to the global economy’s health. More broadly, the prospects for EGA and our sector are very strong due to aluminium’s role in decarbonisation economy-wide. EGA will capitalise on this significant opportunity,” said Abdulnasser bin Kalban, the company’s CEO.

EGA, which is owned equally by Mubadala Investment Company and Investment Corporation of Dubai, paid its shareholders a total of Dhs3.7bn consisting of an interim dividend of Dhs2.2bn in July and a further D1.5bn at the end of 2022.

The company’s adjusted earnings before interest, tax, depreciation and amortisation EBITDA surged by 37 per cent in 2022 to a record Dhs12.4bn compared to Dhs9bn a year earlier.

It also registered an increase in production at every step of the aluminium value chain from mining to cast metal.

EGA delivered record production in 2022 at every step of the value chain from bauxite to cast metal. Our financial performance was the strongest in our history. pic.twitter.com/J3OnBCbNop

— Emirates Global Aluminium (@egaofficial) March 7, 2023

The UAE firm’s bauxite exports from Guinea increased by 16 per cent to 14 million wet metric tonnes. Its bauxite mining subsidiary, Guinea Alumina Corporation, contributed Dhs507m to adjusted EBITDA.

Read: UAE’s EGA plans to build first aluminium recycling facility

Similarly, EGA’s Al Taweelah alumina refinery produced 2.43 million tonnes of alumina, up 5 per cent. The facility met 47 per cent of the company’s total alumina needs, making a Dhs919mn contribution to EGA adjusted EBITDA.

EGA potential IPO

Meanwhile, EGA, which is owned equally by Mubadala Investment Company and Investment Corporation of Dubai, may sell shares to the public as soon as the third quarter of 2023.

“It will happen maybe this year. We’ll see how markets react. If it’s appropriate and makes sense for us and the shareholders, we might go in the third quarter or fourth quarter,” Khaldoon Khalifa Al Mubarak, the CEO of Mubadala Investment Company said in an interview with Bloomberg on the sidelines of the World Economic Forum’s annual meeting in Davos.

The company has been examining the possibility of an initial public offering (IPO) for many years and its listing would follow a boom for IPOs in the UAE that started in 2022 – with at least eight companies expected to list on the Abu Dhabi Securities Exchange this year.

Also read: Abu Dhabi says there’s more to come after year’s biggest IPO

G42, the Abu Dhabi-based artificial intelligence company, is considering at least six more IPOs including G42 Healthcare and AIQ, its joint venture with UAE national energy firm ADNOC Group, according to a Bloomberg report.

EGA’s contribution to UAE’s economy

In other news, EGA announced last October that it had identified hundreds of millions of dirhams of annual procurement spend on imported goods that the company believes could be manufactured locally, contributing to the achievement of the UAE’s Operation 300bn.

The company’s procurement expenditure reached over Dhs17bn in 2021, with 46 per cent supplied by local companies. EGA’s largest expenditures are on raw materials, some of which can only be produced in countries with a natural resource endowment absent in the UAE.