Emirates Steel Arkan: A new chapter of sustainable growth

Industry is at the heart of the UAE’s vision for accelerating economic diversification and our Group’s robust first quarter results underscore the key role Emirates Steel Arkan is playing as the nation’s largest steel and building materials company to support domestic growth and enhance the ‘Made in UAE’ brand.?

Strong Performance?

The Group’s strong across-the-board performance in the first quarter of 2022?reflects the revenue enhancing synergies and cross-selling opportunities unleashed following the combination of Emirates Steel and Arkan Building Materials in the fourth quarter of 2021. Driven by higher levels of efficiency and our proactive approach to increasing domestic and international sales of rebar, wire rods, sections and sheet piles exports,

the Group delivered a first quarter profit of AED 72.6 million compared to AED 1.2 million for the same period in 2021.

Enhancing Shareholder Values

As we take further measures to enhance shareholder value, our ability to turnaround high quality products tailored to the needs of our clients, together with our safe and efficient production lines and very low carbon footprint facilities will continue to give us a competitive edge. In the UAE, we already have a market leading position, providing the local market with 65% of its rebar, wire rod, heavy section and sheet piles requirement. At the same time, we have been enhancing our exports and our products are sold today in 56 countries, a 50% increase from 2019.

Building on our wide range of high-quality products, we are now working on introducing new steel products to broaden our customer base to include manufacturers, complementing our traditional base of construction customers. The added value products that we are producing harness advanced technologies and environmentally friendly processes, using significantly less energy than traditional coal-fired furnaces, and will allow us to increase our current levels of carbon capture.?

Sustainable Growth?

The outlook for the Group’s growth is promising and the positive impact of merging Emirates Steel with Arkan will continue to be felt in 2022. Due to the expectation that 90% of the Group’s full year revenues to come from our steel operations, we have adopted the interim brand of Emirates Steel Arkan and changed our trading ticker to ‘EMSTEEL’. In the coming years, the Group will remain committed to enabling the UAE’s economic growth and diversification targets, in line with the national industrial strategy ‘Operation 300bn.’ The UAE’s economic performance is a rare bright spot globally and our nation is on track to realize strong growth in the medium and long run.

The nation’s construction industry forecast to grow by 4.69% annually from 2022 to 2027 and reach a value of $133.53 billion, according to Mordor Intelligence, and we are supporting the development of the UAE’s economy by supplying our products to major projects such as Etihad Rail and Guggenheim Abu Dhabi. Meanwhile, internationally, the rise in commodity prices amid supply chain bottlenecks is likely to provide us with opportunities while longer term the Group is well-positioned to capitalize on the buoyant demand fundamentals for the domestic and global construction and manufacturing industries.?