Emirates Steel, has released its financial results for the nine months ended September, 2011 noting that its earnings before interest tax and depreciation (EBITDA) had more than doubled year on year and that the net profit for the first nine months showed a 70% increase on 2010's full year result.
Despite the relatively challenging conditions faced in the domestic market the company has increased its market share to approximately 60 per cent and has significantly expanded its export business, particularly for its higher value added wire rod products. As the local construction sector has matured the absolute consumption levels for rebar have reduced - the company has however maintained its position through its policy of actively engaging with the local market: developing long term supply contracts; just in time deliveries; and an absolute focus on customer service, says a statement of the company issued on Sunday.
The step-change in the company's financial performance has resulted from the increased volumes of liquid steel manufactured. In the first nine months of 2011 83% of total finished goods were produced from Emirates Steel's own manufactured steel as against 51% only in the same period in 2010. The increased level of own manufactured steel has enabled the company to remain competitive in the context of the threat of cheap imported materials.
The commissioning of the Phase 2 steel manufacturing assets is on track, with the planned handover of the assets in Q4 2011; the performance levels and the ramp-up of the new assets is significantly ahead of plan.
Suhail M. Al Ameri, Chairman on the occasion said: "The Company has delivered a strong performance in the first three-quarters of 2011, a result which is underpinned by stable steel selling prices, the continuing ramp-up of our Phase 1 assets and the initial contribution from our Phase 2 steel manufacturing plant." "The expansion plans and the overall growth strategy of Emirates Steel are in line with the Government's long-term plans for the development and diversification of the Emirate's economy," commented Al Ameri. "This is not simply growth for growth's sake; the plants we have constructed are delivering financial results ahead of expectations. This supports our contribution to the broadening of the Emirate's GDP and is also creating high quality job opportunities for UAE Nationals," he added.
"As demonstrated by our Q3 results, our Phase 1 expansion has delivered profits whilst servicing its external debt. Phase 2 will be commissioned in Q4 2011 and will further enhance our performance. The success of both the Phase 1 and 2 expansion programs underwrite the Phase 3 project: to produce hot rolled coil and to further increase our overall manufacturing capacity to 4.6 million metric tons per annum".
Eng. Saeed G Al Romaithi, Acting Chief Executive Officer, commented "Our performance continues to be strong, with the anticipated down-turn in Q3, relating to Ramadan and the summer period, failing to materialize; in fact our shipments and our financial performance in August 2011 reflected all time record performance levels for the company".