At US$ 2.05bn, 2018 revenues surge 15% over 2017
Emirates Steel, the only integrated steel plant in the UAE, recently announced an exceptional set of financial results for 2018.
Emirates Steel achieved AED 7.5bn (US$ 2.05bn) in revenue in 2018, an increase of 15% as compared to AED 6.6bn (US$ 1.8bn) in 2017. In addition, Emirates Steel has delivered an outstanding 44% increase in earnings before interest, tax, depreciation and amortization (EBITDA). EBITDA in 2018 reached AED 1bn (US$ 273mn), as compared to AED 678mn (US$ 185mn) in 2017. In addition, Emirates Steel reduced its debt to equity ratio by 9%, from 56% in 2017 to 47% in 2018.
During the recent annual media briefing at Emirates Steel’s headquarters in Industrial City Abu Dhabi, Musaffah, Engineer Saeed Ghumran Al Remeithi, Chief Executive Officer, Emirates Steel expressed satisfaction at the company’s performance.
“Despite the challenges faced by the metals and steel industry globally last year, our results for 2018 were positive. I believe this is a testament to the success of our resilient business model and our sustainable growth strategy. With this year on year growth, we are continuing to enhance our position as a world class steel manufacturer adept at delivering the highest quality products, services and comprehensive solutions to our customers,” he commented.
“While we foresee challenges in 2019, including the slowdown of the regional construction sector, surge in Iron Ore prices, drop in sales prices, market volatility, market protectionism, we remain focused on increasing sales revenues and reducing direct and indirect costs to further improve our financial performance. We are aiming to achieve this through the further development of our product range and by driving efficiencies across the business, focus on customer retention, and customer satisfaction,” Al Remeithi added.
Production, Exports
In 2018 Emirates Steel’s export sales to more than 40 countries accounted for 20% of total volumes, with the remaining 80% being consumed within the UAE, where the company maintains a 60% share of the rebar market and 69% share of the section market. It is worth mentioning that the steel market dropped significantly in second half of 2018, nevertheless the company managed to maintain its sales.
Emirates Steel produced 3.1 million tons of finished products in 2018, in line with the volumes achieved in 2017. Emirates Steel’s presence is solid in the domestic market where it sold 2.514 million tons of finished products, with exports accounting for the remaining 631,000 tons.
Emirates Steel’s reinforcing bars production accounts for roughly 2.1 million tons of the company’s overall production. In addition, the company manufactured 500,000 tons of wire rod and 600,000 tons of heavy sections.
Contracts with Vale, Phoenix
In November 2018, Emirates Steel signed a four-year (2018-2021), high value contract with Vale, the world’s largest producer of iron ore and iron ore pellets, to supply iron ore pellets for its steel production.
Emirates Steel has an iron ore pellet requirement of around 6 million tons per year, and the four-year contract and strategic partnership with Vale provides the company with a flexible source of iron ore at competitive, stable and long term prices.
As part of its efforts to implement best practices to achieve the highest levels of efficiency, reliability and production availability, in July 2018 Emirates Steel signed a 10-year contract with Phoenix Services for a Dust Agglomeration Project. The contract includes collecting Emirates Steel’s by-products and converting them into pellet, and then re-releasing those pellets back into the furnace in our SMP plants.
In addition, Emirates Steel has partnered with DuPont to enhance its Health and Safety performance. The company has launched Aman Safety Excellence Program to maintain its safety performance at or exceeding the highest international standards, further strengthening its safety culture.
Currently, Emirates Steel employs more than 2,200 personnel across all divisions and facilities, with approximately 500 of the them being UAE nationals.
1998-established Emirates Steel is owned by SENAAT, the UAE’s largest industrial conglomerate utilises the latest rolling mill technology to produce rebar, wire rod and heavy sections.
Emirates Steel has grown from a simple re-roller of imported steel billets to a complex integrated manufacturing plant, using modern solutions to tackle traditional industrial problems to generate value for its various stakeholders. In 2012, the Company began producing at a capacity of 3.5 million MTPA (metric tonnes per annum), following two expansions and the investment of around AED 11bn (US$ 3 billion).
