Emirates Steel Arkan, the UAE’s largest listed steel and building materials company, reported a net profit of Dh152.17 million for Q1-2023, nearly doubling its profit compared to the same period last year. The company attributed this increase to strong sales of steel and revenue growth, which rose to Dh2.4 billion from Dh2.04 billion last year.
Emirates Steel Arkan’s performance was further boosted by expanding into new export markets and higher margin products. Going forward, the company is expected to benefit from a further reduction in net bank borrowings by Dh130 million, resulting in a debt-to-equity ratio of 0.12 as of the end of March.
The reduction in net bank borrowings was made possible by the merger between Emirates Steel and Arkan Building Materials, which took place in December 2021. At the end of Q1, the company’s direct costs amounted to Dh2.13 billion, up from Dh1.86 billion a year ago.
Emirates Steel Arkan’s CEO, Jamal Salem Al Dhaheri, said that the company’s success was due to its strategy to prioritize growth in the domestic market and expansion into new international markets. He added that the company would continue to seek opportunities for growth and diversification, in addition to optimizing its operations to further increase profitability.
The company’s strong performance is seen as a positive indicator for the UAE’s construction and manufacturing sectors, which are expected to continue growing in the coming years. The UAE government has been investing heavily in infrastructure projects, including the expansion of airports, seaports, and road networks, which is expected to create a sustained demand for steel and building materials.
Emirates Steel Arkan’s recent success has also drawn attention to the importance of sustainability and environmental responsibility in the construction industry. The company has made significant investments in energy-efficient technologies and processes to reduce its carbon footprint, including the use of scrap metal in its steel production.
With the UAE’s commitment to achieving net-zero carbon emissions by 2050, companies like Emirates Steel Arkan will play a crucial role in the country’s transition to a sustainable economy. The company is well-positioned to meet the growing demand for sustainable building materials and support the UAE’s efforts to reduce its environmental impact.
Overall, Emirates Steel Arkan’s strong Q1-2023 performance is a promising sign for the company and the UAE’s economy as a whole. With a focus on growth, sustainability, and operational efficiency, the company is poised for continued success in the coming years. The country’s leaders have implemented a range of measures to support businesses and maintain economic stability, which has helped mitigate the impact of the pandemic. As a result, companies such as Emirates Steel Arkan are well-positioned to take advantage of the post-pandemic recovery.
As for Emirates Steel Arkan, the company’s focus on innovation and sustainability will be key to its long-term success. The steel and building materials sector is facing increased scrutiny from regulators and customers alike, as they look for environmentally friendly and socially responsible solutions. By investing in new technologies and processes, Emirates Steel Arkan can not only meet these expectations but also differentiate itself from competitors and drive growth in new markets. The government’s efforts to diversify the economy away from oil and gas are also expected to pay dividends in the long run, as new industries emerge and create jobs and opportunities.
In conclusion, Emirates Steel Arkan’s impressive Q1-2023 results are a reflection of the company’s focus on operational efficiency, cost optimization, and customer-centric solutions. The merger with Arkan Building Materials has also created significant opportunities for growth, which the company is leveraging to its advantage. With a strong outlook for the UAE economy and the steel and building materials sector, Emirates Steel Arkan is well-positioned to continue its growth trajectory and create value for shareholders.
