Ma’aden’s profits decline to 1.57 billion riyals by the end of 2023, down 83%

The Saudi Arabian Mining Company revealed a decline in net profit during the year ending on December 31, 2023, to 1.57 billion riyals, compared to 9.31 billion riyals in the year before last, by 83%. This came after today’s announcement of the annual financial results ending on December 31, 2023.

Operating profit amounted to 3.81 billion riyals during the year ending December 31, 2023, compared to 13.53 billion riyals in the year before last, a decrease of 71.8%.

Total ownership rights (after excluding non-controlling interests) amounted to 46.42 billion riyals last year, compared to 45.06 billion riyals in the year before last, an increase of 3%.

Earnings per share last year reached 0.43 riyals, compared to 2.52 riyals in the year before last.

 Sales during the current year decreased by SAR 11 billion (27%) compared to the previous year, mainly due to lower product selling prices for all products except gold. This decrease in sales was partially offset by higher sales volumes for ammonium phosphate, alumina and gold fertilizers.

Net profit for the current year decreased by 7.7 billion Saudi riyals (83%) compared to the previous year. This is due to a decrease in gross profit by 9.3 billion Saudi riyals (57%). This is mainly due to a decrease in sales as a result of lower selling prices of products in the market for all Products excluding gold.

Net profit was also affected by higher financing costs as a result of higher borrowing rates and a lower share of profit from joint ventures as a result of lower selling prices of products in the market. This was partially offset by lower raw material prices, higher income from term deposits, and lower income taxes and zakat expenses.

As a result of the issuance of bonus shares, as approved by the Extraordinary General Meeting on 7 June 2023, the weighted average number of ordinary shares following the issuance of bonus shares was used to calculate basic and diluted earnings per share of ordinary shares from continuing operations for all periods presented.

During the year, the Company reviewed the useful life estimates and residual values for all components of its mining properties, property, plant and equipment. This revision has been accounted for prospectively as a change in accounting estimates. As a result, the Company’s depreciation expense for the year ended 31 December 2023 decreased by SAR 184 million, and the carrying value of mining properties, property, plant and equipment increased by SAR 41 million and SAR 143 million, over respectively, compared to what it would have been using previous estimates of the lifetimes and residual values.