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Rising freight costs impact Emirates Steel Arkan profit

By Pramod Kumar
Revenue from the steel division reached AED1.95 billion during the first quarter, generating a profit for Emirates Steel Arkan of AED86 million Emirates Steel Arkan/X
Revenue from the steel division reached AED1.95 billion during the first quarter, generating a profit for Emirates Steel Arkan of AED86 million

Emirates Steel Arkan reported a net profit of AED128 million ($35 million) in the first quarter of 2024, down 16 percent year on year, due to elevated freight costs on the back of regional geopolitical challenges.

Revenue at the Abu Dhabi-headquartered company for the three months to March 2024 fell 12.5 percent to AED2.1 billion from AED2.4 billion a year ago, despite a challenging and volatile global economic landscape and its impact on commodity prices.

A strong UAE domestic mark supported the company’s performance during the quarter, but exports faced challenges amid tough market conditions. 

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In the first quarter of 2024, global commodity steel prices were negatively affected by a slowdown in the Chinese economy and a lack of investor confidence in Europe. 

Revenue from the steel division reached just under AED2 billion during the first quarter, generating a profit of AED86 million. Revenue from the building materials division stood at AED187 million, with profit at AED42 million.

The continuing cost reduction and transformation programme led to incremental savings of AED46 million.

Emirates Steel Arkan group CEO Saeed Ghumran Al Remeithi said that the company remains focused on advancing towards sustainable production of steel and building materials.

“We will continue to build on this strong progress throughout the year,” he said.

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