EGA reports strong H1 2024 financial performance, driven by high demand for premium aluminium

Emirates Global Aluminium (EGA), the world's largest producer of premium aluminium, has reported strong financial results for Q12024, driven by sustained global demand for premium aluminium.

EGA's adjusted Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) reached AED 4.20 billion ($1.14 billion) for H1 2024, marking a slight increase from AED 4.15 billion ($1.13 billion) in the same period last year. The company's net profit stood at AED 1.84 billion ($500 million), down from AED 1.96 billion ($533 million) in H1 2023, reflecting the impact of the UAE's newly introduced corporate tax, which came into effect on January 1, 2024, at a rate of nine per cent.

EGA's aluminium segment adjusted EBITDA margin improved to 27.5 per cent, compared to 26.9 per cent in the first half of 2023, maintaining its leadership among global industry peers. The company's average realised London Metal Exchange (LME) aluminium price was $2,303 per tonne, slightly decreasing from $2,359 per tonne in H1 2023. The LME aluminium price rose in the second quarter, influenced by increased geopolitical tensions and restrictions on international trade in Russian metal. Additionally, alumina prices surged towards the end of May due to supply disruptions in Australia and India.

In May 2024, EGA completed its first strategic acquisition since its formation in 2014, purchasing European speciality foundry Leichtmetall, expanding its global footprint.

EGA's strong performance in the first half of the year underscores its resilience and strategic focus on premium aluminium production as it continues to navigate the complexities of the global market.

Abdulnasser Bin Kalban, CEO of Emirates Global Aluminium, said, “EGA continues to deliver competitive financial performance throughout the economic cycle through our focus on operational excellence, control of our costs, and long-term commercial relationships with our global customers.

“The first half of 2024 saw our acquisition of Leichtmetall and progress in the development of our recycling plant in the UAE, important first steps in our strategy to grow EGA to meet expanding global demand for low carbon primary and recycled aluminium over the decades ahead. I look forward to further steps before the end of the year.”

“However, safety is our first priority at EGA, and our achievements mean little in the context of a colleague losing his life on our Jebel Ali site. We have investigated this incident thoroughly with an independent third-party expert and shared the findings with our industry. On behalf of everyone at EGA, I again express my deep condolences to our colleague’s family.”

Mohamed Almarzooqi, Acting Chief Financial Officer of Emirates Global Aluminium, said, “Our competitive operational and financial performance has enabled us to further improve our leverage position while delivering great returns for our shareholders. This means we are in a strong position to capitalise on the opportunities from the long-term growth of demand for low carbon primary and secondary aluminium.”

EGA sold 1.30 million tonnes of cast metal to 411 customers in 57 countries in Q1 2024, compared to 1.32 million tonnes in the first half of 2023.

Some 82 per cent of metal sales were value-added products or ‘premium aluminium’ compared to 77 per cent in Q1 2023. EGA focuses on maintaining or growing relative market share in ‘premium aluminium’ in key markets and segments while optimising the EBITDA contribution of VAP sales. During the period, demand for billets was up 18 per cent year-on-year.

EGA sold 149 thousand tonnes of metal to local customers in the UAE in Q1 2023, compared to 148 thousand tonnes in Q1 2023. EGA’s metal supply supports the development of downstream industries in the UAE, further enhancing its contribution to achieving the UAE’s Operation 300bn industrial growth strategy.

During the first half, EGA produced 1.34 million tonnes of hot metal at its smelters in Al Taweelah and Jebel Ali, compared to 1.32 million tonnes in the first half of 2023. Heavy rains in April led to less than five thousand tonnes of production opportunity losses. In April, the H-class gas turbine at Jebel Ali entered a forced shutdown, resolved in July. The unavailability of this turbine reduced production in the first half by three thousand tonnes of hot metal. 

Al Taweelah alumina refinery produced 1.22 million tonnes of alumina during the first half of 2024, compared to 1.15 million tonnes in the equivalent period last year.

EGA’s bauxite mining subsidiary Guinea Alumina Corporation exported 7.19 million tonnes of bauxite, the ore from which aluminium is derived, compared to 6.87 million tonnes in the first half of 2023.

During the first half of 2023, EGA made progress in developing the UAE’s largest aluminium recycling plant in Al Taweelah. The project is progressing, with the first hot metal expected in 2026. On completion, the recycling plant will have a capacity of 170,000 tonnes of secondary billets per year.

In June, EGA published a Green Finance Framework to support decarbonisation projects and initiatives contributing to the transition to a low-carbon economy. Earlier in the period, EGA’s first green loan facility fully funded the acquisition of Leichtmetall.

On 17 June, a contractor tragically lost his life in an incident with a moving vehicle at EGA’s Jebel Ali site. EGA engaged an independent third-party expert to investigate this incident thoroughly. EGA’s Total Recordable Injury Frequency Rate (a broad measure of safety which includes minor incidents) was 1.11 per million hours worked in the first half of 2024, compared to 1.55 per million hours worked in the equivalent period in 2023.