Emirates Global Aluminium likely to delay float after market turmoil

EGA, which produces 2.6 million tons of cast metal a year and is the third-largest producer of primary aluminum outside China, announced plans to float last year. (Courtesy EGA)
Updated 10 May 2018
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Emirates Global Aluminium likely to delay float after market turmoil

LONDON/ABU DHABI: Emirates Global Aluminium’s (EGA) stock market listing is likely to slip to 2019 because of turmoil in global aluminum markets after the US imposed sanctions on Russian aluminum group Rusal, three sources familiar with the deal said.
“The IPO (initial public offering) is delayed to 2019 due to market conditions,” one of the sources said.
EGA, which produces 2.6 million tons of cast metal a year and is the third-largest producer of primary aluminum outside China, announced plans to float last year.
But aluminum prices have been volatile since Washington, in response to what it called “malign activities” by Russia, imposed sanctions on Rusal and shareholder Oleg Deripaska. Benchmark prices on the London Metal Exchange surged to their highest in seven years.
They dropped back by around 9 percent when the US Treasury Department said Rusal’s American customers would have more time to comply with the sanctions. The US Treasury also said it would consider lifting them if Russian tycoon Oleg Deripaska ceded control of the company.
In April, just after the sanctions on several Russian entities took hold, EGA’s chief executive said the company was on track for a listing in the second half of 2018.
“We maintain what we’ve said earlier that it will be 2018, subject to market conditions and we continue to monitor the markets,” an EGA spokesman said on Thursday.
EGA’s IPO would be the second major listing by a state company in the United Arab Emirates since Abu Dhabi National Oil Co. (ADNOC) listed shares in its retail petrol station business in 2017.
The sources said no final decision had been taken on whether the listing would take place in Abu Dhabi or Dubai, while a secondary listing in London was still a possibility. About 10 to 15 percent of the company is likely to be floated, they said.
Sources had previously said that Bank of America Merrill Lynch, Goldman Sachs and J.P. Morgan had been hired to run the IPO.
EGA, owned by Mubadala and Investment Corp. of Dubai, was created in 2013 when state-owned companies Dubai Aluminium and Abu Dhabi’s Emirates Aluminium merged. Its enterprise value was put at $15 billion at the time.
In February, EGA reported a 59 percent rise in 2017 profit to 3.3 billion dirhams ($900 million) on stronger aluminum prices and record production levels.


Emaar Development remains upbeat in face of profit dip

Updated 4 min 55 sec ago
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Emaar Development remains upbeat in face of profit dip

  • Dubai property market under pressure
  • Union Properties post Q3 loss

DUBAI: Property developer Emaar Development has said investor interest in its pipeline of residential projects remains “strong,” while posting a decline in net profit for the third quarter compared to the same quarter last year.
The company recorded a Q3 net profit of 682 million dirhams ($185.67 million), a 33 percent decline on the 1.02 billion dirhams recorded in the same time period last year, according to a filing on the Dubai stock exchange on Tuesday.
Over a nine-month period, Emaar performed well, with profits rising by 19 percent to reach 2.49 billion dirhams, compared to 2.1 billion dirhams recorded in the same time period last year.
The developer recorded 10 billion dirhams’ worth of residential sales in the first nine months of the year, and has a total sales backlog of 38.5 billion dirhams, which will be recognized as revenue in the next three to four years.
Emaar said it is readying to welcome its first residents next year to its Dubai Creek Harbour development.
This year it launched The Grand, a collection of luxury apartments and penthouses in Dubai Creek Harbour, as well as Socio and Collective, co-living spaces in Dubai Hills Estate, among other projects.
“The strong performance of Emaar Development underlines the strength of Dubai’s property sector, driven by the robust economic fundamentals of the nation,” said Mohamed Alabbar, chairman of Emaar Development and Emaar Properties, in a statement.
Alabbar’s comments come as other market commentators raise concerns about the future of the emirate’s real estate market.
While many hope the rebound in oil prices and the World Expo being held in Dubai in 2020 will reignite the property market, there are signs that property prices will remain flat for some time.
Damac Properties Chairman Hussain Sajwani said at the World Economic Forum event on Monday that 2019 will be “another difficult year,” Bloomberg reported.
According to real estate consultancy JLL’s Q3 Dubai report: “The residential market has continued to soften with single digit declines in both sale prices and rents during Q3 2018 despite recent government measures to inject confidence in the market by introducing 10-year residency visas for certain categories of retiree.”
It added: “The lack of new project launches at (the annual property event) Cityscape reflects the subdued investor sentiment and prices are likely to decline further over the next 12 months.”
Union Properties, the developer behind Dubai’s Motor City, also posted its third-quarter results on Tuesday, reporting net profit of 145.6 million dirhams for the first nine months, compared to a net loss of 2.3 billion dirhams in the same period last year.
The results mark a turnaround for the company, which saw its profits hit last year after management had to make provisions to cover previous accounting errors.
The company did, however, post a loss attributable to the shareholders of the company in Q3 of 61.8 million dirhams.