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Emirates Steel today reported a net profit of AED207 million ($56.36 million) in the second quarter of this year, compared with a pre-merger loss of AED24 million in the same period last year.
This figure was an increase of 184% from AED 73 million in the first quarter, supported by higher volumes and prices, improved operational efficiency and the support of the commodity market environment.
Revenue rose to AED2.57 billion in the second quarter. Steel continued to contribute 90% of the group’s revenue, while building materials contributed 10%.
Earnings per share increased to AED 0.03 per share for the quarter, compared to loss per share of AED 0.014 before consolidation in the same period last year. The group posted a net profit of AED280 million in the first six months of 2022, compared to a pre-consolidation loss of AED23 million in the first half of 2021, on revenue of AED4.61 billion in the same period, compared with AED418 million in the same period Ram.
In the first half of 2022, the Group improved factory efficiency, implemented a prudent raw material inventory management process, and kept finished product output at a low level to capitalize on and manage risks from heightened price volatility.
In addition, the group’s balance sheet improved at the end of the first half, mainly due to lower bank borrowings, which improved the group’s net debt-to-equity ratio from 32% at the end of June to 21% at the end of June. December 2021.
Emirates Steel Chairman Hamad Abdullah Mohammed Alshorafa Alhammedi said: “In the second quarter, management continued to integrate Arkan and Emirates Steel, creating additional growth and Jobs. The group is also actively supporting the ‘300 billion operations,’ the UAE’s Industrial Strategy, which will enhance prospects for new business. Emirates Steel Arkan continues to invest in sustainable processes and utilise the latest technologies in line with Abu Dhabi’s Industrial Strategy.
“The strength of the results reflects how the establishment of the National Steel and Building Materials Champion supports the UAE’s further economic diversification by nurturing the growth of the national industrial base and enhancing the competitiveness of UAE goods and services in global markets. . Group in the first half of the year The steps taken to optimize the business will allow us to continue executing our strategy with greater confidence.”
On a standalone basis, the Building Materials business delivered a strong turnaround in the first half of the year, achieving EBITDA of AED70 million compared to AED39 million in the first half of 2021, as volumes and prices increased across all product lines Profit margins have improved under the measures. The group is now preparing to export cement and clinker for the first time.
The Group’s steel business recorded EBITDA of AED524 million in the first half of the year, a significant increase from AED246 million in the first half of 2021. This growth was driven by strong demand for rebar, profiles and sheet piles in Europe and the Americas, increasing the number of export markets from 56 to 60. Rebar sales in the first half rose 8% YoY to 904,000t. Meanwhile, sheet pile revenue in the first half of the year increased by 400% year-on-year.
As part of its strategy to expand its customer base, the group is expanding its sheet piling range, including developing a range of U-shaped piles that are widely used in the construction industry. Work on the new U-Series began in the second quarter, with a market launch expected in early 2023. During the quarter, the efficiency of current sheet pile production was improved, allowing the group to obtain full end-to-end margins.
In line with its commitment to minimising its carbon footprint, the group plans to launch ES600 in the second half of 2022, a high-strength steel bar that will support customers in their efforts to become more environmentally friendly. The new lightweight ultra-high-strength ES600 will also help reduce the carbon footprint of the Group’s steel production, which is significantly lower than the global average carbon footprint of the Group’s peers.
Saeed Ghumran Alremeithi, Chief Executive Officer of Emirates Steel Arkan Group, said: “The Group’s solid second quarter earnings reflected favourable market conditions and demonstrated our greater operational efficiency and our significant reduction in debt and improved cash and inventory management. At the same time, our profitability was also supported by an intensive marketing plan and prudent cost control during the quarter against the backdrop of rising raw material prices.” – arab trade news agency
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