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UAE's Emirates Global Aluminium Swings to Profit in First Half

UAE's Emirates Global Aluminium Swings to Profit in First Half
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UAE's Emirates Global Aluminium Swings to Profit in First Half

UAE's Emirates Global Aluminium Swings to Profit in First Half

Emirates Global Aluminium, one of the world's largest aluminium producers, returned to profit in the first half of 2021 on the back of higher prices for its metal, as global economies recover from the coronavirus crisis.

The company, which is preparing for a potential initial public offering, reported a profit of 1.74 billion dirhams ($473.75 million). EGA reported a loss of 208 million dirhams in the year earlier period. EGA said that the first-half results were the strongest ever.

"I am confident that our performance will continue to improve, making EGA increasingly attractive should our shareholders decide to proceed with an initial public offering, which would be one of the United Arab Emirates’ largest ever," Chief Executive Abdulnasser Bin Kalban said in a statement.

Revenue for the six months ended June 30 stood at 10.8 billion dirhams, compared with 9 billion last year, reported Reuters.

The benchmark price for aluminium on the London Metal Exchange averaged $2,245 per ton in the first half of the year, compared with $1,592 per ton in the same period, a year earlier.

"We are quite bullish for aluminium prices for a number of reasons, on the short term, the recovery post-COVID-19 is supporting the demand for aluminium prices. But looking at the longer term, there's a stronger push for decarbonization and aluminium is a metal that is well placed to make economies more sustainable," said Zouhir Regragui, chief financial officer at EGA in an interview.

EGA, which is jointly owned by Abu Dhabi state investor Mubadala and Investment Corp of Dubai, has asked banks to pitch for roles in a potential public share sale, which bankers say could take place next year.

The company has smelters in Abu Dhabi and Dubai and a bauxite mine in Guinea. It was formed in 2013 through a merger of state-owned Dubai Aluminium and Abu Dhabi's Emirates Aluminium.

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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)

Saudi Arabia’s digital advertising sector is experiencing rapid growth, but a significant portion of its revenues is leaking to foreign platforms. To maximize the impact on the national economy, experts are calling for strategies to curb this outflow and redirect it to local channels.

The importance of retaining digital ad revenues lies in the substantial size of this market. It is estimated that approximately $1 billion in ad spent is lost annually to foreign platforms, representing a considerable loss to Saudi Arabia’s economy.

Dr. Ebada Al-Abbad, CEO of Marketing and Communications at Tadafuq, a Saudi digital advertising network, told Asharq Al-Awsat that the problem stems from the fact that although advertisers, products, and audiences are often local, the largest share of financial gains goes to foreign platforms. He estimated that 70-80% of the $1.5 billion spent on digital advertising in Saudi Arabia in 2022 went to global platforms such as Google and Facebook. This results in the national economy losing nearly $1 billion annually from this sector alone.

Al-Abbad noted that government agencies in Saudi Arabia also contribute to the outflow. He explained that public sector spending on digital advertising, intended to raise awareness among citizens and residents, frequently ends up on foreign platforms. Government spending makes up about 20-25% of the total digital ad market in the Kingdom, meaning hundreds of millions of riyals leave the country annually, weakening the local digital economy.

Al-Abbad argues that Saudi Arabia needs strong local digital ad networks to keep this revenue within the national economy. These networks would help create jobs, drive innovation, and promote cultural diversity in digital content. Developing local platforms would also enhance Saudi Arabia’s digital sovereignty by ensuring that data remains within the country and is not controlled by foreign entities.

Moreover, local networks would reduce dependence on international platforms, ensuring that the economic benefits of digital advertising remain in the Kingdom, he said, stressing that this would align with Saudi Arabia’s broader Vision 2030 goals, which emphasize building a robust, diversified economy driven by local industries and digital transformation.

Globally, the digital advertising sector is growing rapidly. In 2022, worldwide spending on digital ads reached $602 billion, and it is projected to hit $876 billion by 2026. In the Middle East and North Africa (MENA) region, the digital ad market grew to $5.9 billion in 2022, with Saudi Arabia’s market accounting for over $1.5 billion.

In other countries, the digital ad sector plays a crucial role in boosting national economies. For example, in the United States, the digital advertising industry contributed $460 billion to the GDP in 2021, about 2.1% of the total. In the UK, the sector accounted for 1.8% of GDP in 2022. This shows how important digital advertising can be in driving economic growth.

One of the key challenges facing Saudi Arabia’s digital ad sector is the dominance of global platforms like Google and Facebook, which control 60% of the global digital ad market, Al-Abbad told Asharq Al-Awsat. This dominance results in a significant outflow of revenue and allows these platforms to control digital data and content. He warned that this could undermine Saudi Arabia’s national sovereignty over its digital economy.

To counter this, he emphasized that Saudi Arabia needs to build competitive local networks that can retain a larger share of the market. This will not only keep more revenue in the country but also strengthen the Kingdom’s control over its digital data and content.