Emirates Global Aluminium (EGA), the largest industrial company in the United Arab Emirates outside the oil and gas sector, witnessed a significant decline in profits for the year 2023. This drop aligns with a global slump in aluminium prices, impacting the company's revenue stream.
According to a statement released by EGA on Tuesday, the company's net profit for the twelve months ending December 2023 stood at Dh3.4 billion (approximately $937 million). This figure represents a sharp decrease compared to Dh7.4 billion recorded during the same period in the previous year, reflecting a decline of over 50%.
The company attributed the decline in profits primarily to lower global benchmark prices for aluminium. EGA acknowledged a 15% year-on-year drop in revenue, reaching Dh29.5 billion in 2023. While increased production and sales volume partially offset the impact of lower prices, it was not enough to prevent the overall decline in profit.
Despite the challenging market conditions, EGA emphasized its commitment to operational efficiency and cost control measures. The company highlighted its success in maintaining "competitive financial results compared to our global peers" and its commitment to shareholder value through "record-equalling dividends." EGA's adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) for 2023 reached Dh7.7 billion, compared to Dh12.4 billion in the previous year.
The global aluminium market has faced headwinds in recent times, with prices experiencing a downward trend. This decline is attributed to various factors, including concerns over a potential global economic slowdown and rising energy costs impacting production.
EGA's experience reflects the broader challenges faced by the aluminium industry. The company's performance serves as a microcosm of the industry's current struggle to navigate a complex economic landscape marked by fluctuating prices and evolving market dynamics. As EGA and other industry players adapt to these changing conditions, the future trajectory of the aluminium market remains to be seen.