RIYADH: Saudi Arabian Mining Co., widely known as Ma'aden, posted a net profit of SR2 billion ($532 million) in the first half of 2024, a significant 160 percent increase compared to the same period in 2023.
This increase in profitability was driven by several key factors. A major contributor to this financial success was a significant increase in sales volume, according to a Tadawul statement.
The company's strong performance in primary aluminum and gold sales played a key role in driving revenue. Ma'aden also benefited from lower raw material costs and lower depreciation costs, which further boosted its profitability.
The company also saw the favorable impact of several one-time financial adjustments. An insurance event related to the unloading of vessels in smelters in the amount of SR 469 million provided a significant financial reserve. In addition, Ma'aden was positively impacted by the absence of a one-time severance payment of SR192 million that affected its profitability in the previous year.
Despite these gains, the increase in net profit was somewhat tempered by several issues. The overall decline in commodity market prices for most of Ma'aden's products, with the notable exception of gold and alumina, put pressure on the company's revenues. In addition, the company faced increased income taxes and zakat, which also offset some of the profits.
Operationally, Ma'aden continued to make significant strides in its strategic initiatives. The Phosphate 3 project, an ambitious expansion effort, has progressed with construction activities well underway. Meanwhile, the company moved forward with plans for a new aluminum recycling plant in Ras Al-Khair, aimed at boosting sustainability efforts. The successful completion of Ma'aden's investment in Vale Base Metals through its Manara joint venture was another highlight that allowed the company to capitalize on growing demand for green metals.
“We delivered a strong first half of 2024, demonstrating our ability to realize the benefits of operating efficiencies in a stable environment,” said Ma'aden CEO Bob Wilt.
“Our large-scale phosphate 3 project is progressing, construction is underway and we are moving forward with a new aluminum recycling plant in Ras Al-Khair.”
He said: “The successful completion of our investment in Vale Base Metals through Manara will further increase our exposure to green metals.”
During this period, Ma'aden remained committed to its strategic goals, including a focus on operational efficiency and technological innovation. The company is actively pursuing one of the world's largest greenfield exploration programs, which is expected to drive future mineral discoveries.
“Our strategic partnerships and technology-led innovation programs are accelerating mineral discoveries through the world's largest greenfield exploration program of its kind,” added Wilt.
Financially, Ma'aden reported net revenues of SR 14.53 billion for the first six months of 2024. This represented a slight decrease of 3.19 percent from the previous year, mainly due to lower commodity prices, although higher volumes of primary aluminum and gold sales helped moderate the decline.
In terms of credit ratings, Ma'aden's strong business profile was confirmed by Moody's Investor Service in August 2023, which assigned the company a long-term issuer rating of Baa1 with a stable outlook. The rating reflects Ma'aden's solid credit strength and expected support from the UK sovereign wealth fund, which remains the company's majority shareholder.
Overall, Ma'aden's impressive performance and strategic advances underline its commitment to lead the mining sector and contribute to Saudi Arabia's economic diversification goals, particularly in developing mining as a critical pillar of the Kingdom's industry.
