Emsteel's H1 revenue surges to Dh4.3b amid market headwinds

Khaleej Times

2 days ago

Emsteel, the Abu Dhabi-based industrial heavyweight and one of the region's largest steel and building materials manufacturers, reported strong financial results for the first half of 2025, underscoring its resilience and operational strength despite global pricing challenges in the steel sector.
The company posted a revenue of Dh4.3 billion for H1 2025, a 9 per cent increase compared to the same period last year. Earnings before interest, taxes, depreciation and amortisation (Ebitda) rose by 6 per cent year-on-year to Dh540 million, supported by strong demand, higher sales volumes, and strategic product shifts.
The group's solid performance was powered by a 24 per cent year-on-year increase in sales volumes of finished steel products, which reached 1.616 million tonnes. This growth reflects a continuing uptrend in domestic construction activity and infrastructure development, particularly in the UAE, where major giga-projects, including the Etihad Rail, the Al Hudayriat Island masterplan, and the Zayed City infrastructure programme, have driven demand for structural steel.
Cement and clinker sales also rose 21 per cent to 1.613 million tonnes, contributing to the revenue mix. This diversification was instrumental in counterbalancing the 4 per cent decline in average steel prices globally.
The company's decision to pivot away from semi-finished product sales—once constituting 9 per cent of the steel division's revenue—enabled full utilisation of capacity for high-margin finished goods.
The Emirates Steel division generated Dh3.9 billion in revenue, a 7 per cent increase from H1 2024, with Ebitda at Dh449 million. Meanwhile, the Emirates Cement division delivered Dh428 million in revenue, a 21 per cent year-on-year increase, and posted Dh91 million in Ebitda. A segment of this division, Pipes and Other Products, is currently under divestment and contributed Dh90 million to revenue during the period.
Net profit after tax for the half-year stood at Dh188 million, up from Dh174 million a year ago. Margin pressures from softer pricing were mitigated by improved production efficiency, enhanced utilisation rates, and ongoing optimisation strategies, especially in the second quarter.
Ebitda margins remained relatively stable at 12.6 per cent compared to 12.8 per cent in H1 2024. Second-quarter performance further underscored Emsteel's momentum. Revenue surged 18 per cent and Ebitda climbed 27 per cent year-on-year, partly due to a low base effect from Q2 2024, when operations were affected by severe weather conditions.
The company also closed the period with a healthy net cash position of Dh372 million, up from Dh337 million as of December 2024, providing it with solid liquidity to support growth and sustainability initiatives. Beyond financial metrics, Emsteel has made notable strategic and environmental advances.
In Q2 2025, the company received a provisional 'AA' ESG rating from MSCI, placing it among the leading industrial firms in environmental and social governance performance. The rating reflects Emsteel's industry-leading practices in emissions reduction, workforce safety, and sustainable production.
A key highlight was Emsteel's partnership with Finland-based Magsort to advance its decarbonised cement portfolio. A pilot project at the company's Al Ain plant used 10,000 tonnes of steel slag-derived materials to produce lower-carbon cement. This initiative aligns with Emsteel's broader goal of achieving net-zero emissions across its steel and cement value chains by 2050, and reinforces the group's circular economy strategy.
To support these ambitions, Emsteel also introduced its Green Finance Framework, enabling the issuance of green bonds and loans to fund low-carbon projects. The framework aligns with international sustainability standards and opens new avenues for climate-conscious capital inflows.
'Our strong H1 2025 performance underscores the resilience and adaptability of Emsteel in an evolving global market,' said Eng. Saeed Ghumran Al Remeithi, group CEO of Emsteel. 'The 9 per cent growth in revenue and continued Ebitda strength reflect our strategic focus on value-added products, operational efficiency, and domestic market leadership. We are proud of our team's ability to convert industry headwinds into opportunities for growth and innovation.' '
The launch of our Green Finance Framework and the partnership with Magsort are milestones in building a more sustainable, circular steel and cement ecosystem. With a solid financial foundation, strong ESG credentials, and a clear long-term vision, Emsteel remains well-positioned to deliver sustainable value to all stakeholders,' Al Remeithi said.
Emsteel, majority-owned by ADQ, a key sovereign investor in the UAE, operates 16 advanced production facilities with a capacity of 3.5 million tonnes of steel and 4.6 million tonnes of cement annually. Its products support many of the nation's most iconic infrastructure and urban development projects.