Emirates Global Aluminium 2015 profit drops on weak prices

Emirates Global Aluminium (EGA), one of the world’s biggest producers of the metal, posted an almost 50 per cent drop in net profit last year as the price of aluminium plunged amid a supply glut.

State-owned EGA’s net pro­fit plunged to Dh1.9 billion last year from Dh3.7bn a year earlier even as sales grew 4 per cent to 2.4 million tonnes. Revenue dropped 5.5 per cent to Dh18.7bn last year from Dh19.8bn in 2014.

“Last year was challenging for the aluminium industry, largely due to global macroeconomic uncertainty, growth slowdown in China, a stronger US dollar and falling oil prices,” said Abdulla Kalban, managing director and chief executive of EGA.

Aluminium prices plummeted 18 per cent last year, with its price on the London Metal Exchange sliding to a six-year low of US$1,432.50 a tonne in Nov­ember. The price rout has led to the closures of several smelters around the world as producers compete with increased production, mainly from China.

Global aluminium production increased by 9 per cent last year to 57.89 million tonnes, accord­ing to data from the International Aluminium Institute. The Arabian Gulf region produced 5.1 million tonnes of aluminium last year, a 5.6 per cent increase from 2014, according to the institute.

China’s production soared 12 per cent, to 31.67 million tonnes last year, from a year earlier. Global supply is expected to increase again this year.

Last year, EGA said it cut 250 jobs as a result of the merger of its operations in Dubai and Abu Dhabi.

EGA, jointly owned by Abu Dhabi’s Mubadala and the Investment Corporation of Dubai, was formed from the 2013 merger of Dubai Aluminium, or Dubal, based in Jebel Ali, with Abu Dhabi’s Emirates Aluminium, or Emal. Together they have a total annual production capacity of 2.4 million tonnes per year.

EGA is aiming to start production at its 2 million-tonne-per-annum alumina refinery in Khalifa Industrial Zone in Abu Dhabi in 2018.

The price of the metal has rebounded in recent months, gaining 3.62 per cent since the start of the year amid a weakening of the dollar, which usually boosts demand for commodities. Long term, rising demand for aluminium from car makers seeking lighter materials for greater fuel efficiency is expected to support prices.

dalsaadi@thenational.ae

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