EGA posts 63% surge in Ebitda to Dh4.1billion

Emirates Global Aluminium (EGA) recorded on Tuesday a 63 per cent surge in adjusted Ebitda (earnings before interest, taxes, depreciation and amortisation) of Dh4.1 billion for 2020 compared to the previous year.

Abdulnasser bin Kalban, CEO of EGA, said the company delivered a significantly improved financial performance in 2020 in the most challenging year for the global aluminium industry in decades.

“We achieved this through product flexibility, a relentless focus on controllable costs and cash generation, and strong ramp-up performance in our new upstream projects despite the additional challenges of Covid-19,” he said in a statement.

EGA’s smelting Ebitda margin for 2020 was 23 per cent (2019: 14 percent), ranking among the best globally, the company said.

EGA maintained its position as the world’s largest ‘premium aluminium’ producer by volume, with sales of value-added products of 1.8 million tonnes or 72 percent of total sales. EGA sold value-added products in 2020 to more than 400 customers in over 50 countries.

“EGA sold 2.52 million tonnes of cast metal in total in 2020 compared to 2.60 million tonnes in 2019. Local sales to the downstream aluminium sector that has grown around EGA into one of the UAE’s most significant industries, were 252 thousand tonnes compared to 294 thousand tonnes in 2019,” the company said.

Cash generated from operating activities was up 35 per cent to Dh5.5 billion, compared to Dh4.1 billion in 2019. EGA continued to improve working capital, which was reduced by more than Dh1.4 billion in 2020 to generate additional cash, and also focused on further improving operational efficiency.

“The recovery of the global aluminium market that began in the second half of 2020 has continued into 2021, based on the brightening world economic outlook and growing optimism about the rollout of Covid-19 vaccination. We expect benchmark aluminium prices to remain around $2,000 for 2021 as a whole,” said Kalban.

Lower benchmark aluminium prices and premiums led to a reduction in revenue to Dh18.7 billion, compared to Dh20.5 billion in 2019, partially offset by the ramp-up of bauxite sales from EGA’s bauxite mining subsidiary Guinea Alumina Corporation.

GAC exported 9.56 million tonnes of bauxite ore, making EGA the second-largest third-party seller of bauxite in the world in its first full production year.

EGA said its Al Taweelah alumina refinery produced 1.92 million tonnes of smelter grade alumina, close to its annual nameplate capacity of 2.0 million tonnes in its first full year of production. Al Taweelah alumina refinery’s production was at or above nameplate capacity in each month of the fourth quarter of 2020. Al Taweelah alumina refinery supplies EGA’s aluminium smelters.

As part of its debottlenecking of production and investment in high return growth projects, EGA is expanding the existing potlines at its Al Taweelah aluminium smelter by 66 reduction cells to increase production capacity by 78,000 tonnes of hot metal per year.

The expansion project is currently 60 per cent complete. Energisation of the new reduction cells, which use EGA’s proprietary technology, is expected in three phases during 2021 with all the new reduction cells in production this year, EGA said.

— issacjohn@khaleejtimes.com