Ma’aden Profits Jump 265% in Q2 to SR4 bln

The net profit after zakat and tax for the Saudi Arabian Mining Company (Ma’aden) jumped to SR4 billion during the second quarter, compared to SR1.1 billion during the same quarter of the previous year, by 265%.

This came after the announcement on Thursday of the financial results for the period ending on 30-06-2022 “6 months”.

The operational profit amounted to SR5.5 billion during the second quarter, compared to SR1.6 billion during the same quarter of the previous year, a growth of 245%.

The gross profit amounted to SR6.15 billion during the second quarter, compared to SR2 billion during the same quarter of the previous year, an increase of 199%.

The net profit after zakat and tax during the current period amounted to SR6.2 billion, compared to SR1.86 billion during the same period of the previous year, an increase of 232%.

Profits per share during the current period amounted to SR2.52, compared to SR0.76 during the same period of the previous year.

The reasons for the increase in net profit during the current quarter compared to the same quarter of the last year are:

• Higher average realized sales prices of all products except industrial mineral products;
• Higher sales volume mainly from ammonia, primary aluminium, ammonia phosphate fertilizer, industrial mineral products and gold with slightly lower sales volume recorded for flat rolled products, alumina and Meridian’s* products;
• Higher net profit of joint ventures attributable to Ma’aden; and
• Higher income from time deposits.

This increase in net profit is partially offset by:

• Higher cost of sales by 41% as a result of higher raw material costs and higher production levels as well as higher selling, marketing and logistic expenses by 27%. General and administrative expenses increased by 42% due to higher cost of personnel and contracted services. Also, exploration and technical services increased by 32% due to higher drilling activities and zakat and income tax expense was higher by 109% as a result of higher profitability.

* Meridian = Meridian Consolidated Investments Limited (“MCIL”).

The reasons for the increase in net profit during the current quarter compared to the previous quarter are:

• Higher average realized sales prices of all products except gold;
• Higher sales volume mainly from ammonia phosphate fertilizer, ammonia, primary aluminium, flat rolled products and alumina, despite lower sales volume of gold, industrial mineral products and Meridian’s products;
• Higher net profit of joint ventures attributable to Ma’aden;
• Higher income from time deposits; and
• Lower selling, marketing and logistic expenses by 8% and general and administrative expenses by 6%.

This increase in net profit is partially offset by:

• Higher cost of sales by 14% as a result of higher raw material costs and higher production levels. Increase in exploration and technical services by 63% due to higher drilling activities. Also, zakat and income tax expense was higher by 35% as a result of higher profitability.

The reasons for the increase in net profit during the current period compared to the same period of the last year are:

• Higher average realized sales prices of all products;
• Higher sales volume mainly from ammonia, ammonia phosphate fertilizer, primary aluminium, industrial mineral products and Meridian’s products, with slightly lower sales volume from flat rolled products, gold, and alumina;
• Higher net profit of joint ventures attributable to Ma’aden;
• Higher income from time deposits; and
• Lower finance costs by 3%.

This increase in net profit is partially offset by:

• Higher cost of sales by 33% as a result of higher raw material costs and higher production levels as well as higher selling, marketing and logistic expenses by 55%. General and administrative expenses increased by 46% due to higher cost of personnel and contracted services. Also, exploration and technical services expenses increased by 24% due to higher drilling activities and zakat and income tax expense was higher by 137% as a result of higher profitability.

As a result of voluntary reclassification, as at 30 June 2022, the Group has reclassified the “cash flow hedge reserve attributable to ordinary shareholders of the parent company” from “Retained earnings” and presented it within “Other reserves” for better presentation for all period presented.

As a result of issuance of bonus shares, as approved by Extraordinary General Assembly on 30 May 2022, the outstanding weighted average number of ordinary shares post the bonus shares issuance (2,461,182,292 shares) have been used for calculation of basic and diluted earnings per ordinary share from continuing operations, for all periods presented.