Ma’aden, Saudi Arabia’s leading mining company, reported a triple digit rise in profitability for the first half of the year. It posted a 160 per cent increase in profitability for H1 2024 compared to the same period in 2023.
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This significant growth was driven by a substantial rise in sales volume of SAR218m(3 per cent) in Q2 2024 , particularly in primary aluminium and gold, according to a statement issued on Saudi stock exchange Tadawul.
Its net profit for the current quarter increased by SAR673m(192 per cent) compared to the same quarter of the prior year.
The company’s robust financial performance was bolstered by reductions in raw material costs and lower depreciation expenses, alongside a series of one-off financial adjustments that positively impacted profits, it added.
Among these, an insurance claim related to the relining of pots in its smelter plants added SAR469m to the company’s bottom line. Additionally, the absence of a SAR192m severance charge, which had weighed on profits the previous year, further contributed to the increase, the statement revealed.
Ma’aden highlights mining industry challenges
However, despite these gains, the rise in net profits was somewhat moderated by challenges such as a decline in commodity prices for most of Ma’aden’s products, excluding gold and alumina. The company also faced higher income taxes and zakat, which tempered the overall profit growth.
Operationally, Ma’aden made significant progress in its strategic initiatives. The Phosphate 3 project, an expansion effort, advanced with construction activities in full swing. Additionally, plans for a new aluminium recycling plant at Ras Al Khair was on track, aligning with the company’s sustainability goals.
The completion of Ma’aden’s investment in Vale Base Metals through its joint venture, Manara, was another highlight, positioning the company to benefit from the rising demand for green metals.
Commenting on the results, Ma’aden CEO Bob Wilt said, “We delivered a strong first half of 2024, demonstrating our ability to realise the benefits of operational efficiencies in a stable environment. Our large-scale Phosphate 3 project is progressing well, and we are advancing plans for a new aluminium recycling plant at Ras Al-Khair.”
He added, “The successful completion of our investment in Vale Base Metals through Manara is set to increase our exposure to green metals.”
Financially, Ma’aden reported net revenues of SAR14.53bn for the first six months of 2024, a slight decline of 3.19 per cent from the previous year, primarily due to lower commodity prices. However, higher sales volumes of primary aluminium and gold helped offset this drop.
Ma’aden’s strong business profile was affirmed by Moody’s Investor Service in August 2023, which assigned the company a Baa1 long-term issuer rating with a stable outlook. This rating reflects Ma’aden’s solid standalone credit strength and the anticipated support from the Kingdom’s sovereign wealth fund, which remains the company’s majority shareholder.
Ma’aden and Bahri collaboration
In other developments, Ma’aden and Bahri, the national shipping carrier, have signed a letter of intent to explore business integration opportunities. This partnership aims to localise maritime industries and develop more resilient supply chains within the kingdom.
Ma’aden, which produced 9,099 kmt of phosphate, 1,825 kmt of alumina, and 407 koz of gold in 2023, exported its products to over 30 countries.
The company also produced 614,000 tonnes of blue ammonia, certified as “ultra-low carbon” ammonia, making it the largest exporter of this sustainable product. Blue ammonia, produced through a carbon-efficient process, represents a significant step in Ma’aden’s commitment to sustainability and reducing its carbon footprint.
Ma’aden noted that it remains committed to its strategic goals, focusing on operational efficiencies and technological innovation. The company is actively advancing one of the world’s largest greenfield exploration programmes, which is expected to drive future mining initiatives.
