Emirates Global Aluminium Earns Record Profits in 2021
Emirates Global Aluminium, the world’s largest premium aluminium producer and the biggest industrial company in the UAE outside oil and gas, on Monday reported record adjusted Earnings Before Interest, Tax, Depreciation and Amortisation (adjusted EBITDA) and net profit for 2021.
Adjusted EBITDA more than doubled to $2.5 billion for 2021, from $1.1 billion for 2020. Net profit was $1.5 billion, an increase of 1,140%t compared with $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 $6.9 billion, compared with $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% 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.
Capital Structure Optimised
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 $730 million to $5.5 billion, made scheduled and then full early repayment of the outstanding $446 million project financing for the construction of Al Taweelah smelter, and made scheduled repayments on Guinea Alumina Corporation debt.
EGA’s shareholders received $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 $438 million in December 2021.
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. AL solar aluminium was almost 39,000 tonnes during 2021, with all production supplied to BMW Group.
Journey Nearing Completion
EGA CEO Abdulnasser Bin Kalban 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 Q1 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.”