Emsteel, one of the largest publicly traded steel and building materials manufacturers in the region, has seen its nine-month (9M) revenues fall 9% to AED5.9 billion ($1.6 billion).
This revenue decrease is primarily attributed to several market dynamics, including fluctuations in global steel prices, heightened competition, and evolving demand patterns influenced by economic uncertainties in key markets.
However, Emsteel maintained overall steel production volumes in line with the rate attained for the same period of 2023.
Low-priced Chinese steel
Emsteel's profitability margins have been significantly impacted by a surge of low-priced Chinese steel exports, which have directly or indirectly influenced prices across many of the group’s strategic markets, including GCC and Emsteel's key export destinations such as Europe and the US. For 9M, Emsteel recorded EBITDA of AED645 million, with an EBITDA margin of 11.0%, compared to 13.6% in 2023. The group’s net profit before tax stood at AED101 million.
Revenue from the group’s Emirates Steel division totalled AED5.34 billion during the nine months period, generating a profit before tax of AED20 million. Emirates Steel’s performance was affected by adverse global market conditions and a one-off provision of AED83 million in relation to a legal claim which is subject to appeal.
Revenue from the group’s Emirates Cement division was AED537 million during the first nine months of 2024, with profit before tax of AED81 million. The net profit margin for Emirates Cement increased to 15%, compared to 14% during the first nine months of 2023.
Robust liquidity position
As of the end of Q3 2024, the group continued to maintain a robust liquidity position of AED623 million cash in hand compared to AED426 million as of December 31, 2023.
The results demonstrate overall adaptability across the group’s operations, showcasing the resilience of its Steel division (Emirates Steel) in navigating challenging market conditions, as well as the continued improvement of profitability of its Building Materials division (Emirates Cement).
Strategic highlights
The group has been awarded five prestigious "UAE Industry 4.0 Digital Leader" titles by the Ministry of Industry and Advanced Technology (MoIAT), demonstrating its unwavering commitment to advancing digital transformation in the steel industry.
In September 2024, the group was appointed as co-chair of the Alliance for Industry Decarbonisation (AFID) led by the International Renewable Energy Agency (IRENA). Emsteel will be co-chairing the renowned global industrial alliance alongside Siemens Energy, replacing TATA Steel within the alliance leadership role.
Eng Saeed Ghumran Al Remeithi, Group Chief Executive Officer of Emsteel, said: “During 9M 2024, Emsteel continued to demonstrate resilience and adaptability in responding to challenging market conditions putting pressure on steel price, including declining global demand for steel, regional political instability and economic challenges, subdued activity and a surge in Chinese steel exports to international markets.”
“With our continued focus on innovation and sustainability, we are committed to bringing advanced solutions to the market towards driving low-carbon products across the industry. Our pilot project with Masdar is one that we are particularly proud of and is key in decarbonising a hard-to-abate sector. We will continue to forge strategic partnerships and pioneer innovative solutions to build a better world for all.”--TradeArabia News Service
