Emirates Steel, the only integrated steel plant in the UAE, and a subsidiary of the General Holding Corporation (SENAAT), has announced an outstanding set of financial results for 2018.
Emirates Steel achieved AED 7.5 billion in revenue in 2018, an increase of 15% as compared to AED 6.6 billion in 2017. In addition, Emirates Steel has delivered an incredible 44% increase in earnings before interest, tax, depreciation and amortization (EBITDA). EBITDA in 2018 reached AED 1 billion, as compared to AED 678 million in 2017. In addition, Emirates Steel reduced its debt to equity ratio by 9%, from 56% in 2017 to 47% in 2018.
During an annual media briefing held today at Emirates Steel’s headquarters, Engineer Saeed Ghumran Al Remeithi, Chief Executive Officer of Emirates Steel said: “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.”
“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. The success of our strategy and our ability to deliver the highest quality products is increasingly evident through the growing demand for Emirates Steel’s products in international markets,” added. Eng. Al Remeithi.
Production performance and efficiencies
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.
In November of 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 (Mill-scale, FTP Dust, IOP & DRI Fines, DR Sludge), and converting them into pellet, and then re-releasing those pellets back into the furnace in our SMP plants.
As part of this contract, Phoenix Services will build a plant in Phase 2, which is expected to be completed in the middle of Q2 2019. This project will not only be beneficial from an environmental stand point, but also from an efficiency and cost perspective.
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.