Ma’aden profits decline to SAR 419.4 million in Q1 by 81%

Saudi Arabian Mining Company (Ma’aden) net profit after zakat and tax fell to SAR 419.4 million during the first quarter, compared to SAR 2.17 billion in the same quarter of last year, by 81%. This came after the announcement on Monday of the interim financial results for the period ended on 31.03.2023 (Three months).

The operational profit amounted to SAR 930 million in the first quarter, compared to SAR 3.26 billion in the same quarter of the previous year, a decrease of 71%.

Gross profit amounted to SAR 1.58 billion in the current period, compared to SAR 3.88 billion in the same period last year, a decrease of 59%.

Profit per share in the current period amounted to SAR 0.17, compared to SAR 0.88 in the same period last year.

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

• Lower average realized sales prices of all products except gold;
• Higher cost of sales by 28% as a result of increased raw material costs and production operating costs;
• Higher general and administrative expenses by 15%;
• Higher exploration and technical services expenses by 129%;
• Higher finance cost by 105% due to increase in SIBOR and LIBOR rates; and
• Lower share in net profit of joint ventures attributable to Ma’aden by 40%.

This decrease in net profit is partially offset by:

• Higher sales volumes of all products except mainly primary aluminum and gold;
• Lower selling, marketing and logistic expenses by 30%;
• Income from time deposits 11.6 times higher, due to increased investments placed and deposit rates;
• Lower other non-operating expenses by 97%; and
• Lower zakat and income tax expense by 24% as a result of decrease in profitability.

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

• Lower average realized sales prices of all products except alumina, primary aluminum, flat rolled products and gold;
• Lower sales volumes of all products except ammonium phosphate fertilizer and alumina;
• Higher finance cost by 11% due to increase in SIBOR and LIBOR rates;
• Higher other non-operating expenses by 101% mainly due to decrease in gain on currency exchange relating to Meridian; and
• Lower share in net profit of joint ventures attributable to Ma’aden by 6%.

This decrease in net profit is partially offset by:

• Lower cost of sales by 6% as a result of decreased production operating costs;
• Lower selling, marketing and logistic expenses by 37%;
• Lower general and administrative expenses by 22%;
• Lower exploration and technical services expenses by 5%;
• Income from time deposits 1.5 times higher, due to increased investments placed and deposit rates; and
• Lower zakat and income tax expense by 35% as a result of decrease in profitability.

During Q2 2022, the Group has voluntarily 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. The comparative information as of 31 March 2022 has been restated to conform to the new presentation. 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.