Manufacturing

EGA reveals sharp drop in profits

March 13, 2025, 12:13 PM

EGA said a new 9 percent UAE corporation tax helped reduce profits but higher aluminium prices boosted revenues

Net profit down 24%
$488m hit from Guinea suspension
But revenues up 1.7%

Profits at Emirates Global Aluminium (EGA) have fallen by nearly a quarter as a result of the suspension of operations in Guinea and introduction of corporation tax in the UAE.

In October 2023, the Guinea Alumina Corporation, a subsidiary of EGA, was hit by the Guinean government’s decision to halt exports of bauxite, a raw material for aluminium production.

This led to a significant drop in shipments, the company said.

As a result, EGA took an impairment of AED 1.8 billion ($488 million) on its Guinea operations by the end of the financial year.

Abdulnasser Bin Kalban, CEO of EGA, said the company continued to seek a resolution with the Guinean government to resume bauxite mining and exports.

EGA is the UAE’s largest non-oil company and one of the largest aluminium producers in the world. It is jointly owned by Mubadala Investment Company, the Abu Dhabi sovereign wealth fund, and Investment Corporation of Dubai, a Dubai sovereign wealth fund.

A new 9 percent UAE corporation tax also crimped profits, the company said. The combination of these two factors contributed to a 24 percent decline in net profit to AED2.6 billion.

Despite these challenges, EGA posted a year-on-year revenue increase of AED500 million, or 1.7 percent, to AED30 billion.

Its performance was buoyed by a rise of 5.6 percent in aluminium prices, up from $2,264 per tonne in 2023 to $2,392 per tonne in 2024 on the London Metal Exchange. The company attributed the increase to geopolitical tensions, energy price fluctuations, and speculation regarding interest rate cuts.

EGA’s results were released on the same day that US President Donald Trump imposed a 25 percent tariff on all aluminium and steel imports into the US, a major market for Middle Eastern producers.

EGA forecast continued price volatility in the aluminium market, noting that the global aluminium market is expected to face a 500,000 tonne deficit in 2025, according to the research firm CRU.

However, the company expects alumina markets to “normalise” in the coming year as additional capacity comes online.

S&P Global Market Intelligence has revised its world economic growth forecast for 2025 down from 2.6 percent in February to 2.4 percent in March, with the US projected in its March update to cool from 2.3 percent in February to 1.9 percent.

“This slowdown will likely result in decreased global demand for aluminium, influenced by a stronger dollar and heightened trade barriers, particularly from the US,” said Ashima Tyagi, economics associate director at S&P Global Market Intelligence.