Emirates Global Aluminium, one of the world’s largest aluminium producers, said on Tuesday first-half net profit surged nearly 250 percent to 5.9 billion dirhams ($1.6 billion) on higher prices and operational efficiencies.
Net profit was up from 1.7 billion dirhams in the first half of last year and exceeded net profit for the full year 2021. EGA’s average realized price in the half was $3,063 per tonne from $2,131 in the first half of 2021.
“We expect the market condition to be more challenging in the second half, but we remain well on course for a strong year overall,” Chief Executive Officer Abdulnasser bin Kalban told Reuters in an online interview.
EGA expects 2022 to be another record year following record results last year.
“However, we do expect this to be a story of two halves. As you know, the economic outlook is uncertain and aluminium prices have already dropped from their high. So we do not expect to see the same aluminium price in the second half,” Chief FinancialOfficer Zouhir Regragui told Reuters.
Adjusted earning before interest, taxes, depreciation, and amortization (EBITDA) hit a record 7.6 billion dirhams in the first half from 3.5 billion dirhams in the first half of 2021.
The aluminium segment’s EBITDA margin was 41 percent in the period, up from 32 percent a year earlier. That was one of the highest margins in the industry, Regragui said.
EGA paid an interim dividend of $600 million, and the results also allowed the company to reduce debt, as it pre-paid corporate debt of $800 million in the first half and $1.8 billion in total since January 2021.
It expects to cut debt further in the second half, Regragui said.
Factors that will impact aluminium prices in the next 12 months include overall macroeconomic conditions, global demand, China’s zero-COVID policy and energy prices, particularly in Europe due to the Russia-Ukraine conflict, the CFO said.
“IPO, you know, I’m sure it’s part of the plan but there is no specific time,” bin Kalban said, adding it was up to shareholders to decide when to list the business and they had so far not given the go-ahead.
EGA is owned equally by Abu Dhabi sovereign wealth fund Mubadala and Dubai sovereign wealth fund the Investment Corporation of Dubai.