Financial Performance Highlights for 2024
In its preliminary (unaudited) results for the full year 2024, EMSTEEL demonstrated resilience despite a challenging market environment. The Group achieved a total revenue of AED 8.3 billion, representing a 6% decline from the previous year’s revenue of AED 8.9 billion. This reduction in revenue is attributed to several factors, including fluctuations in global steel prices, rising competition, and changing demand trends driven by economic uncertainties in key markets.
Despite these challenges, EMSTEEL achieved a solid Profit Before Tax (PBT) of AED 432 million and a Net Profit After Tax (NPAT) of AED 392 million. The company’s strong profitability was bolstered by the reversal of a COVID-related impairment, contributing AED 189 million to the Net Profit. The company also showed significant financial strength with a net cash generation of AED 401 million, resulting in a balance sheet free of net debt.
Impact of Market Conditions and Strategic Resilience
The market conditions for the steel industry were challenging, influenced by increased low-priced Chinese steel exports that affected prices in key markets like the GCC, Europe, and the US. Despite these pressures, EMSTEEL leveraged increased construction activity in the UAE, particularly in the rebar segment, to maximize capacity utilization. This allowed the Group to maintain a strong performance, especially in the latter part of the year, where the fourth-quarter EBITDA of AED 247 million marked an 81% improvement from the third quarter of 2024.
The Group's Emirates Steel division generated AED 7.6 billion in revenue for 2024, contributing AED 680 million in EBITDA. However, this performance was impacted by adverse global market conditions. Meanwhile, Emirates Cement's revenue reached AED 0.8 billion with an EBITDA of AED 212 million. Within the Cement division, the Pipes & Other segment, valued at AED 156 million in revenue, is currently undergoing a divestment process and is reported as assets held for sale.
Cash Position and Liquidity
EMSTEEL closed the year with a robust liquidity position. By the end of 2024, the Group’s cash reserves stood at AED 823 million, an increase from AED 426 million as of 31 December 2023. This strong liquidity provides EMSTEEL with the financial flexibility to navigate future market challenges and invest in its transformative projects.
Strategic Highlights and Innovations
EMSTEEL’s strategic direction in 2024 was characterized by a series of transformative initiatives aimed at strengthening its market presence and sustainability commitments.
1.Rebranding and Global Expansion
In line with its growth objectives, EMSTEEL launched a new brand identity as part of a broader operational transformation strategy. This rebranding is designed to enhance the company’s global presence, allowing for the seamless integration of new divisions and enabling further expansion into new markets and product lines.
2.Low-Carbon Iron Joint Venture
EMSTEEL made significant strides in advancing its Low-Carbon Iron Joint Venture project. The comprehensive feasibility study for this project is underway, aiming to position Abu Dhabi as a global leader in sustainable steel production. This project represents a pivotal step in the Group's efforts to reduce carbon emissions in steel production.
3.Green Hydrogen Pilot Project
A milestone in EMSTEEL’s decarbonization strategy was the successful completion of a green hydrogen pilot project in collaboration with Masdar. This innovative project, the first of its kind in the MENA region, demonstrates the use of green hydrogen to extract iron from iron ore, a key step in sustainable steelmaking.
4.Industry Leadership and Recognition
In 2024, EMSTEEL's leadership in sustainability was widely recognized. The Group was appointed as co-chair of the Alliance for Industry Decarbonisation, led by the International Renewable Energy Agency, alongside Siemens Energy. Additionally, EMSTEEL was named a 2024 Steel Sustainability Champion by the World Steel Association and received commendations from the World Economic Forum for its outstanding decarbonization efforts. The Group also won multiple awards, including the Best Sustainable Manufacturing and In-Country Value Excellence Awards at the Make it in the Emirates Awards 2024.
Commitment to Sustainable Growth and Economic Progress
As part of its growth strategy, EMSTEEL has maintained a strong commitment to innovation, sustainability, and the adoption of low-carbon solutions. The UAE's booming construction sector, with over $772 billion in ongoing and upcoming projects, is expected to drive continued demand for sustainable steel and building materials. EMSTEEL’s strategic investments in green steel production and low-carbon technologies position the Group to capitalize on the ongoing infrastructure boom in the region.
Leadership's Vision for the Future
Hamad Al Hammadi, Chairman of EMSTEEL, highlighted the company’s transformational year, emphasizing the importance of adaptability and focus in driving innovative solutions that create long-term value for stakeholders. Group CEO, Eng. Saeed Ghumran Al Remeithi, also reiterated the company’s commitment to sustainable practices, stating that the ongoing transformation, including the green hydrogen project and the Low-Carbon Iron Joint Venture, will drive EMSTEEL’s leadership in decarbonizing the steel industry.
With its strong financial position, strategic initiatives, and focus on sustainability, EMSTEEL is well-positioned to lead the region’s steel and building materials sectors towards a low-carbon future. The company’s continued investment in innovation and sustainable growth will be key to meeting future challenges and seizing emerging opportunities in global markets.
