EGA Delivers Adjusted EBITDA Of $950 Million In H1 2021, Up 111% On Same Period Last Year In Strongest-Ever Half-Year Financial Performance Amid High Demand For Aluminium

Emirates Global Aluminium, the largest industrial company in the United Arab Emirates outside oil and gas, today reported a profit for the first half of 2021 of AED

1.74 billion ($473 million), the company’s strongest half-year financial performance ever.

EGA’s adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation (adjusted EBITDA) was AED 3.49 billion ($950 million), up 111 per cent on the same period last year.

Some 86 per cent of the company’s metal sales were value-added products compared to 75 per cent in H2 2020 and 69 per cent in H1 2020.

EGA’s Al Taweelah alumina refinery delivered record production of 1.09 million tonnes, above the nameplate capacity of the plant which was commissioned in 2019. Guinea Alumina Corporation, EGA’s bauxite mining subsidiary, exported 5.85 million tonnes of bauxite ore as ramp-up continued, up from

5.47 million tonnes in H2 2020.

EGA’s metal sales were lower at 1.18 million tonnes, compared to 1.25 million tonnes in H2 2020 and 1.27 million tonnes in H1 2020.

EGA supplied some 442 customers with metal in the first half of 2021, in 57 countries. EGA’s aluminium is the biggest made-in-the-UAE export after oil and gas.

In the UAE, EGA supplied 140 thousand tonnes of metal to local customers that make everything from car parts to window frames for both the UAE market and export.

In January, in a world first, EGA began producing aluminium using solar power through a partnership with Dubai Electricity & Water Authority sufficient to make 40,000 tonnes in the first year with potential for significant further expansion. BMW Group is the first customer for EGA’s CelestiAL aluminium.

Abdulnasser Bin Kalban, Chief Executive Officer of EGA, said: “Global demand for aluminium, the metal that makes modern life possible, is high as economies rebound from COVID-19. The commitment of many Governments around the world to build back better for future societal resilience means the long-term outlook for the aluminium market is good. At EGA, our focus on ‘premium aluminium’, made to customer specifications for the applications in which it will be used, positions us well to benefit from this increased demand.

“Although our financial performance in the first half of 2021 was EGA’s best ever, we could have done even better. Our metal production was slightly lower, and we are upgrading our carbon plants and debottlenecking elsewhere to return to metal output growth.   Like many other industrial companies, we were also affected by global logistics challenges including container availability, and we are adopting different approaches in response such as break-bulk shipping.

“Al Taweelah alumina refinery continued its world-class performance, exceeding nameplate capacity just two years after start-up.

“I am confident that EGA’s performance will continue to improve, making EGA increasingly attractive should our shareholders decide to proceed with an Initial Public Offering, which would be one of the UAE’s largest ever.”

Zouhir Regragui, Chief Financial Officer of EGA, said: “We have a positive outlook on the global aluminium market which we believe will remain strong over the long-term, driven by the accelerating push for decarbonisation, and stronger supply discipline.

“In these buoyant market conditions EGA is highly cash-generative, enabling us to further strengthen our balance sheet by deleveraging the company and preparing us for the next stage in our corporate development.”

The benchmark London Metal Exchange price for aluminium averaged $2,245 per tonne in the first half of 2021, compared to $1,812 per tonne in H2 2020 and $1,592 per tonne in H1 2020.

EGA commissioned 52 new reduction cells at Al Taweelah during the first half of the year, increasing annual hot metal production capacity by 60 thousand tonnes. A further 14 new reduction cells, adding an additional 18 thousand tonnes of annual production capacity are expected to be commissioned during the second half of 2021.

The highly-efficient power block under development by a joint venture of EGA’s shareholders, Mubadala and Dubal Holding, is in the production testing phase with project completion expected within weeks. The new power block will improve the efficiency of power generation, delivering cost and environmental emissions savings.

EGA’s safety performance continued to be better than industry benchmarks, but there were three injuries in the first half of 2021 leading to time off work, the first lost time injuries at the company since 2019. All these colleagues have fully recovered.

EGA’s Total Recordable Injury Frequency Ratio, a broader measure of workplace safety, was 1.17 per million hours worked, compared to 1.21 in H2 2020 and 1.47 in H1 2020.

EGA continues to focus on the prevention of COVID-19 to secure the health of its employees and the company’s operations. As at the end of H1, some 88 per cent of EGA employees had been voluntarily vaccinated, and over 4,800 contractors had also received vaccinations at the company in the UAE and Guinea.

Since the end of the first half of 2021, EGA has successfully refinanced $5.5 billion of corporate debt, deleveraging by $1 billion and improving repayment terms to reduce costs and enable an optimal dividend policy in future years for shareholders.

The new facility, which is a senior unsecured loan, reprofiles EGA’s scheduled debt repayments and extends them by 2.5 years. The terms include a mechanism that delivers material reductions in the cost of the debt to EGA as the company further strengthens its balance sheet and reduces leverage.

Some 22 local, regional and international banks participated in the transaction.