An official source at Egypt Aluminium (Egyptalum) has said the company’s business results for the fourth quarter (Q4) of fiscal year (FY) 2019/20 have been negatively impacted by lower aluminium prices.
The company’s results for this period have been also hit by lower sales due to declining exports. The sources added that Egyptalum aims to invest about EGP 900m in a complete overhaul of its production cell operations.
The source said that his company is close to deciding on the best offer regarding engineering consulting services as part of its project to increase aluminium production. He added that he expects the company to begin taking serious steps to implement the project in September.
The new production expansion project aims to work with the latest aluminium industry technology to increase production by 250,000 tonnes annually. This would bring the company’s total annual production to 570,000 tonnes by 2022.
Egyptalum’s move to increase aluminium product comes as part of its support for national industry needs and the mega projects currently taking place across the country.
A 10 piaster per kw/h reduction in the cost of electricity is also expected, which will partially offset the decrease in aluminium prices.
The source pointed out that the company’s financial results have generally been affected by three factors, namely electricity prices, the price of aluminium on the global stock exchange, and the dollar exchange rate. Electricity prices have had the strongest impact on business results, affecting up to 40% of the total cost of producing a tonne of aluminium.
Egypt has approved its budget for the current FY 2020/2021, with aluminium sales of EGP 10.5bn projected, compared to the expected EGP 8.2bn for FY 2019/20.
