Ma’aden, also known as the Saudi Arabian Mining Co., has made significant strides in the first half of 2024, achieving a net profit of SR2 billion ($532 million). This impressive 160 percent increase compared to the same period in 2023 can be attributed to a variety of factors that have contributed to the company’s financial success.
One of the key drivers of Ma’aden’s profitability surge was the boost in sales volume. The company saw robust performance in primary aluminum and gold sales, which played a crucial role in driving up revenues. Additionally, Ma’aden benefited from reductions in raw material costs and lower depreciation expenses, further enhancing its profitability.
In addition to these operational factors, Ma’aden also saw a favorable impact from several one-off financial adjustments. An insurance claim related to the relining of pots within its smelter plants provided a substantial financial cushion, amounting to SR469 million. Furthermore, the absence of a one-off severance charge that had affected profitability in the previous year also contributed to the company’s improved financial performance.
Despite these gains, Ma’aden faced some challenges that tempered the rise in net profits. The decline in commodity market prices for most of the company’s products, with the exception of gold and alumina, put pressure on revenue. Additionally, increased income taxes and zakat offset some of the profit gains.
Operationally, Ma’aden continued to make significant strides in its strategic initiatives. The Phosphate 3 project, an ambitious expansion effort, saw progress with construction activities well underway. The company also moved forward with plans for a new aluminum recycling plant at Ras Al-Khair, aimed at enhancing sustainability efforts. The successful completion of Ma’aden’s investment in Vale Base Metals through its joint venture, Manara, positioned the company to benefit from the growing demand for green metals.
Ma’aden’s CEO, Bob Wilt, expressed satisfaction with the company’s performance, highlighting the progress of strategic initiatives such as the Phosphate 3 project and the aluminum recycling plant. He also emphasized the importance of the investment in Vale Base Metals through Manara, which is expected to increase Ma’aden’s exposure to green metals.
Financially, Ma’aden reported net revenues of SR14.53 billion for the first six months of 2024, representing a slight decline of 3.19 percent from the previous year. This decrease was primarily due to lower commodity prices, although higher sales volumes of primary aluminum and gold helped mitigate the drop.
In terms of credit ratings, Ma’aden’s strong business profile was affirmed by Moody’s Investor Service, which assigned the company a Baa1 long-term issuer rating with a stable outlook. This rating reflects Ma’aden’s solid standalone credit strength and the anticipated support from the Kingdom’s sovereign wealth fund, which remains the company’s majority shareholder.
Overall, Ma’aden’s impressive performance and strategic advancements underscore its commitment to leading the mining sector and contributing to Saudi Arabia’s economic diversification goals. By developing mining as a critical pillar of the Kingdom’s industry, Ma’aden is playing a key role in driving economic growth and sustainability in the region.