Emirates Steel Arkan Reports $580 Million Revenue in Q1 2024

Demonstrating its resilience and efficiency amidst challenging market conditions, Emirates Steel Arkan, one of the largest publicly traded steel and building materials manufacturers in the region, on Wednesday reported $580 million in revenue and EBITDA of $80.04 million.

During the quarter, the Group’s performance was supported by a strong UAE domestic market. However, its export business faced challenges due to tough market conditions. In the first three months, global commodity steel prices were negatively affected by a slowdown in the Chinese economy and a lack of investor confidence in Europe.

Additionally, regional geopolitical challenges led to elevated freight costs. As a result, the Group has registered a marginal 8% year-on-year decrease of net profit before tax to $38.12 million, compared with $41.38 million in the corresponding period in 2023.

The Group achieved a solid operating performance in Q1 of 2024, maintaining volumes of UAE domestic steel sales, despite a challenging and volatile global economic landscape and its impact on commodity prices.

Revenue from the Steel division totalled $530 million generating a profit after tax of $23.41 million. Revenue from the Building Materials division was $50.91 million with profit after tax of $11.43 million.

The Group’s continuing cost reduction and transformation programme contributed incremental savings of $12.52 million in Q1 2024. The Group’s net profit after tax was $34.85 million, reflecting the standard tax rate of 9% in this first period that the Group’s profits have been subject to corporate taxes.

The Group has further improved its net borrowing position and as of the end of Q1 2024, it had $42.2 million net cash position compared with net bank debt of $17.15 million as of 31 December 2023.

Strategic Highlights

In line with its long-term strategy and growth objectives, the Group has entered a framework memorandum with Omani counterparts to explore a green metal project.

The Group has been recognised as a 2024 Steel Sustainability Champion by the World Steel Association for its efforts in enhancing sustainability in its operational practices throughout 2023.

The Group also successfully marketed its Z-type and U-type sheet piles as sustainable flood defence solutions to strengthen communities against floods.

Emirates Steel Arkan Director and CEO Saeed Ghumran Al Remeithi said that despite the challenging global economic landscape impacting commodity prices, the Group has maintained its resilience and solid performance.

“We remain committed to prioritising the safety of our people, achieving operational excellence, effective cost management, and fostering customer relationships. In addition, our dedication to financial prudence has yielded tangible results, underscoring our financial strength and strategic foresight,” he said.

“As we navigate throughout 2024, we remain focused on delivering value to our stakeholders while advancing towards the sustainable production of steel and building materials. We will continue to build on this strong progress throughout the year,” he added.