Maaden’s profits decline by 91.2% in Q2 to SAR 350.9 million

The Saudi Arabian Mining Company revealed a decline in net profit after zakat and tax in the second quarter to SAR 350.9 million, compared to SAR 4 billion in the same quarter of last year, by 91.2%. This came after the announcement on Sunday of the interim financial results for the period ending on June 30 (6 months).

The operating profit amounted to SAR 843.3 million in the second quarter, compared to SAR 5.5 billion in the same quarter of the previous year, a decrease of 84.8%.

The net profit after zakat and tax during the 6-month period amounted to SAR 770.3 million, compared to SAR 6.2 billion in the same period last year, a decline of 87.5%.

The total shareholders’ equity “without minority rights” amounted to SAR 45.8 billion in the current period, compared to SAR 45 billion in the same period last year, an increase of 1.8%.

Earnings per share in the current period reached SAR 0.21 riyals, compared to SAR 1.68 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 general and administrative expenses including expected credit loss allowance by 40%.
• Higher exploration and technical services expenses by 116%.
• Higher finance cost by 86% due to increase in SIBOR and LIBOR rates.
• Lower share in net profit of joint ventures attributable to Ma’aden by 59%.
• Higher zakat, income tax and severance fees expenses by 2% mainly due to one-off severance fees charge which was partially offset by lower zakat and income tax as a result of decrease in profitability.

This decrease in net profit is partially offset by:

• Higher sales volumes of all products except ammonia, primary aluminum and flat rolled products.
• Lower cost of sales by 6% due to decrease in raw material costs which was partially offset by increased production costs as a result of higher sales volumes.
• Lower selling, marketing and logistic expenses by 17%.
• Income from time deposits 5.1 times higher, due to increased investments placed and deposit rates.
• Higher other non-operating income by 164%.

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, flat rolled products and gold.
• Higher selling, marketing and logistics expenses by 10%.
• Higher general and administrative expenses including expected credit loss allowance by 14%.
• Higher exploration and technical services expenses by 54%.
• Lower share in net profit of joint ventures attributable to Ma’aden by 21%.
• Higher zakat, income tax and severance fees expense by 80% mainly due to one-off severance fees charge which was partially offset by lower zakat and income tax as a result of decrease in profitability.

This decrease in net profit is partially offset by:

• Higher sales volumes of all products except alumina and flat rolled products.
• Lower cost of sales by 17% due to decrease in raw material and operating costs which was partially offset by increased production costs as a result of higher sales volumes.
• Higher income from time deposits by 6% due to increased investments placed and deposit rates.
• Lower finance cost by 8% due to higher capitalization of finance cost attributable to capital project.
• Higher other non-operating income by 32.3 times.

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

• Lower average realized sales prices of all products except gold.
• Higher cost of sales by 10% due to increased production costs as a result of higher sales volumes which was partially offset by decrease in raw material costs.
• Higher general and administrative expenses including expected credit loss allowance by 27%.
• Higher exploration and technical services expenses by 121%.
• Higher finance cost by 96% due to increase in SIBOR and LIBOR rates.
• Lower share in net profit of joint ventures attributable to Ma’aden by 51%.

This decrease in net profit is partially offset by:

• Higher sales volumes of all products except primary aluminum and flat rolled products.
• Lower selling, marketing and logistic expenses by 24%.
• Income from time deposits 7.1 times higher, due to increased investments placed and deposit rates.
• Higher other non-operating income by 137%.
• Lower zakat, income tax and severance fees expense by 9% as a result of decrease in profitability which was partially offset by one-off severance fees charge.