The Saudi Arabian Mining Company, one of the largest mining companies in the Gulf, reported a more than jump in net profit in the second quarter as commodity prices rose and sales increased due to strong demand for its products.
Ma’aden, as the Riyadh-listed company is called, posted a record net profit of 4.03 billion Saudi riyals ($1.07 billion) in the three months to the end of June, down from 1.13 billion riyals in the same period last year. said in a deposit on the Tadawul stock exchange, where its shares are traded.
Earnings before interest, taxes, depreciation and amortization increased to 6.9 billion riyals, reflecting a strong sales performance.
Revenue for the April-June period jumped more than 94% to 11.87 billion riyals. Gross profit for the reporting period increased by approximately 200% to 6.15 billion riyals.
The company attributed the rise in quarterly revenue to “higher average realized selling prices” for nearly all of its industrial mineral products.
Higher sales volume – mainly ammonia, primary aluminum, ammonia phosphate fertilizers and industrial mineral products – also supported profit growth during the period, it said. he declares.
The company also saw a higher contribution from joint venture revenue, as well as term deposit revenue.
In the first six months of the year, Ma’aden’s net income jumped over 200% on an annual basis to a record 6.2 billion riyals. Sales jumped 80% to 20.8 billion riyals during the period.
“Ma’aden had a record first half, thanks to improved operations, leading to increased sales,” said chief executive Robert Wilt.
“This record performance, supported by favorable market momentum, was achieved while… progressing towards our ESG [environment, social and governance] Goals.”
Commodity prices have risen sharply this year, due to supply chain bottlenecks. The conflict between Ukraine and Russia added to the market disruption, accelerating the rise in prices.
Commodities such as gold, seen as a hedge against inflation, have risen in recent weeks. Spot gold was trading near $1,786.71 an ounce at 12:52 p.m. UAE time on Thursday, after hitting its highest level since July 5 at $1,807.79 Wednesday.
Ma’aden, majority-owned by the kingdom’s Public Investment Fund, is central to Riyadh’s economic diversification strategy. The expansion of the industrial and mining sectors is one of the key objectives of the kingdom’s Vision 2030 agenda.
The mining law aimed at boosting foreign direct investment in the sector, which came into effect last year, is expected to help the Arab world’s largest economy explore mineral resources worth around 5 trillion riyals and to tap into gold reserves of around 20 million ounces, Invest Saudi said. Last year.
“As we look to the remainder of 2022, we will continue to invest in production capacity across our current portfolio to meet demand, while exploring Saudi Arabia’s untapped mineral resources to ensure long-term sustainable growth,” Wilt said.
Earlier this year, Ma’aden signed an agreement to build the world’s largest solar-powered steam plant which will be used to refine bauxite into alumina, as part of its expansion strategy.
In April, Ma’aden and Emirates Global Aluminium, the largest industrial company in the United Arab Emirates outside the oil and gas sector, agreed to extend a pact to collaborate on greener aluminum smelting technology as part of their efforts to stimulate sustainable production.
The deal extends an initial pact signed in 2018 and allows the companies to jointly explore and develop new aluminum smelting technology with lower greenhouse gas emissions, they said at the time. .
The company said its ammonia III plant increased production, contributing to an increase in overall sales.
Ma’aden Wa’ad Al Shamaal Phosphate Company’s production also continued to increase in the first half of 2022, leading to a 15% increase in phosphate fertilizer sales volume.
Ma’aden is also on track to increase its current gold mining capacity by 70% with a new plant at Mansourah Massarah – which is in the commissioning phase – which is expected to be the largest gold project in the kingdom. , the company said.
Updated: August 11, 2022, 12:16 p.m.