Emirates Steel Arkan Reports Strong Performance Despite Global Challenges

Emirates Steel Arkan, the largest steel and building materials manufacturer in the UAE, has reported a strong financial performance for the first nine months of 2023. 

The company achieved Dh6.48 billion in revenues and a net profit of Dh387.6 million, showcasing resilience in the face of global headwinds.

Factors Behind Success:

• Strong Demand in UAE: The company benefited from robust demand from the UAE’s construction sector, contributing to its overall performance.
• Stable Margins: Despite a dip in global steel prices, Emirates Steel Arkan maintained stable margins.
• Value-Added Products: The company’s focus on manufacturing and selling value-added products, domestically and for export markets, played a significant role in its success.

In the third quarter, the company achieved a net profit of Dh107.1 million, further affirming its financial stability.

Global Steel Industry Challenges:

While the global steel industry faced challenges due to declining Chinese construction activities and market uncertainties in Europe, Emirates Steel Arkan’s diversified portfolio and strong presence in the domestic market helped it weather these challenges.

The financial results underscore the company’s resilience and agility in maintaining revenue and profit growth even in challenging market conditions.

Emirates Steel Arkan managed to reduce its net bank debt by over 60% and bolster its balance sheet to navigate the global headwinds.

EBITDA Growth and Debt Reduction:

The company reported an EBITDA of Dh884 million for the first nine months, representing a 3% increase from the previous year. 

The EBITDA margin for this period also improved to 13.6%. Net bank debt decreased by 61% to Dh424 million, resulting in a net debt-to-EBITDA ratio of 0.36 as of September 30, 2023.

Commitment to Value-Added Products:

Emirates Steel Arkan maintained its commitment to prioritizing higher-value-added products, enhancing efficiency, and optimizing EBITDA through its Namaa 2.0 transformation program.