Despite challenging global conditions, Emirates Steel Arkan, the largest steel and building materials manufacturer in the UAE based in Abu Dhabi, demonstrated robust growth in the third quarter of 2023.

With total revenues of Dh6.48 billion and a net profit of Dh387.6 million for the first nine months of the year, the company has weathered the storm.

This success can be attributed to the strong demand from the UAE’s construction sector, stable margins even in the face of falling global steel prices, and the consistent growth in the production and sale of value-added products for both domestic and export markets.

In the third quarter alone, Emirates Steel Arkan achieved a net profit of Dh107.1 million.

Saeed Ghumran Al Remeithi, the Group CEO, emphasized the steel industry’s global challenges due to factors such as declining Chinese construction activities and market uncertainties in Europe.

However, he expressed satisfaction with the company’s continuous year-on-year and quarter-on-quarter profitability.

According to the financial results, the steel division contributed Dh5.81 billion in revenue and Dh295.3 million in profit, while the building materials division added Dh670.7 million in revenue and Dh92.3 million in profit for the same period.

Overall, the nine-month net profit amounted to Dh387.6 million, surpassing the previous year’s Dh383.2 million.

While global steel faces turbulent times, Al Remeithi stressed the strength of the domestic demand in the UAE and the company’s diversified portfolio, enabling them to maintain profitability.

The financial results also revealed a substantial reduction in net bank debt by over 60%, strengthening the company’s financial position to navigate the challenging conditions. EBITDA for the nine months increased by 3% compared to the same period in 2022, reaching Dh884 million.

The EBITDA margin expanded to 13.6% from the previous year’s 12.1%. The company’s net bank debt decreased to Dh424 million, resulting in a net debt-to-EBITDA ratio of 0.36 as of September 30, 2023.

Emirates Steel Arkan has prioritized higher-value-added products and implemented the Namaa 2.0 transformation program to enhance efficiencies and optimize EBITDA.

Moreover, the company has made progress in its decarbonization efforts by introducing low-carbon products and aims to achieve a 40% reduction in carbon emissions by 2030, ultimately reaching net-zero emissions by 2050.

Emirates Steel Arkan also joined the ‘ResponsibleSteel’ initiative, focusing on socially and environmentally responsible production of net-zero steel on a global scale.

The company’s steel and building materials have played a significant role in some of the UAE’s most iconic construction projects, including the Burj Khalifa, Emirates Palace, Etihad Towers, Yas Island, and more.

 

Last Updated: 02 November 2023