Emirates Steel Arkan announces its financial results for the first quarter of 2022
Emirates Steel Arkan (ADX: EMSTEEL) (the “Group”), the largest publicly traded building materials company in the UAE, announced its first quarter results.
The Group reported revenues of AED 2.04 billion for the first quarter of 2022, compared to AED 233.5 million in 2021. The robust earnings reflect the positive impact of the merger in Q4 2021 of Arkan and Emirates Steel, the largest integrated steel manufacturer in the Middle East. Net profit was AED 72.6 million compared to AED 1.2 million for the same period in 2021, boosted by enhanced operational performance and higher sales volumes. The Group expects 90% of full year revenues in 2022 to derive from Emirates Steel and 10% from the Arkan operations.
On this occasion; Hamad Abdullah Mohammed Al Shurafa Al Hammadi, Chairman of Emirates Steel Group, Arkan, said: “Today we started seeing the promising prospects of the successful merger step between Emirates Steel and Arkan, in addition to the positive effects of the management changes we made, which is clearly reflected in the strong financial results achieved by the consolidated group. For the first quarter of 2022. We can say that the management of the group has made great strides in its endeavors to enhance the efficiency of the group and benefit from its full potential. As the largest national company specialized in building materials, Emirates Steel Arkan will play a pivotal role in advancing the industrial development in the country and enhancing the unified identity “Made in Emirates’, and supporting the national economy, which is witnessing a continuous diversification process.”
On a standalone basis, Emirates Steel announced a net profit of 61.1 million dirhams during the first quarter of 2022, an increase of 265% over the first quarter of 2021. This strong growth is supported by the increase in exports of rebar, structural sections and panels to regions including Asia and America North. Rebar sales rose 8% to 462,000 metric tons in the first quarter due to increased demand in Asian markets. Meanwhile, sales of structural sections increased by 104% due to improved export sales to North American markets. Meanwhile, each of Arkan’s business units was able to achieve profits in the first quarter, as the company recorded on a standalone basis a net profit of 11.5 million dirhams, an increase of 942% year-on-year.
The first quarter witnessed the implementation of a program to enhance the organizational structure of the group in order to accelerate the pace of integration, explore new aspects of business unification, and improve the operational efficiency aspects of the group. Emirates Steel also appointed Arkan, the international sustainability consultancy, Engie Impact, to assess the group’s carbon footprint and develop a detailed roadmap to accelerate the implementation of the group’s zero carbon emission program. In the coming quarters, Emirates Steel will also begin marketing its new lightweight and ultra-high-strength steel rebar (ES600), which is designed to enhance the company’s customers’ capabilities in the construction sector using fewer raw materials, thus reducing the carbon footprint of construction projects.
On his part, Eng. Saeed Ghamran Al Rumaithi, CEO of Emirates Steel, Arkan, said: “The group’s strong financial results confirm the positive impact of the strategic merger process and the regulatory changes that occurred in the first quarter. Alongside the improvement in demand levels and higher prices, we have achieved gains from improving operational efficiency and applying a proactive approach. In terms of sales, we will work over the coming quarters to meet the needs of our wide and growing customer base in the construction and manufacturing sectors by diversifying our innovative product range and strengthening our capabilities in terms of marketing and sales.
