Saudi Mining Giant Ma’aden Reports Significant Decline in Q1 Net Profit Amidst Rising Costs
Saudi Arabian Mining Company, commonly known as Ma’aden, has announced a sharp drop in its first-quarter net profit by nearly 81 percent.
The company attributed the decline to higher costs of sales, increased expenses, and lower average selling prices for all products except gold.
Ma’aden reported a net profit of 419.41 million Saudi riyals ($111.84 million) for the three months ending in March, compared to 2.18 billion riyals in the same period last year, according to a filing with the Tadawul stock exchange.
The primary factors impacting net profit were a one-off utilities charge and the rising prices of raw materials. Revenue for the January to March period witnessed a decline of almost 10 percent, totaling 8.05 billion riyals.
Gross income and operating profit also experienced significant decreases of over 59 percent and 71.4 percent, respectively.
Despite these challenges, Ma’aden remains focused on optimizing existing operations and launching new projects. Robert Wilt, the CEO of Ma’aden, highlighted the company’s efforts to increase production and sales volumes in their core phosphate business unit, resulting in strong cash generation.
Ma’aden, majority-owned by the kingdom’s Public Investment Fund, plays a central role in Riyadh’s economic diversification strategy and aligns with the objectives of the Vision 2030 agenda.
As part of its corporate strategy, Ma’aden aims to achieve tenfold growth by 2040 and expand into strategic minerals to support downstream industries in Saudi Arabia.
To pursue global mining investment opportunities, Ma’aden has partnered with the Public Investment Fund. Recently, the company signed an agreement to acquire a 9.9 percent stake in Vancouver’s Ivanhoe Electric, further strengthening its position in the mining sector.
These strategic partnerships demonstrate Ma’aden’s commitment to the long-term development of the Saudi mining sector and creating value for its shareholders.
While Ma’aden reported a significant increase in net profit for the full-year 2022, driven by higher sales and average product prices, the first quarter of 2023 presented challenges due to market conditions. General and administrative expenses rose by 15 percent, and exploration and technical services expenses saw a substantial increase of 129 percent compared to the same period last year.