The Saudi Arabian Mining Company, one of the Gulf's biggest miners, reported a more than 65 per cent jump in third-quarter net income as sales climbed and average prices of its products increased.
Ma’aden, as the Riyadh-listed company is known, posted 2.1 billion Saudi riyals ($560.67 million) in the three months to the end of June, up from 1.27bn riyals recorded in the same period last year, it said in a filing to the Tadawul exchange on Tuesday, where its shares are traded.
Earnings before interest, taxes, depreciation and amortisation rose 37 per cent at the end of the third quarter to more than 4.2bn riyals. It was, however, lower than 6.9bn riyals recorded in the second quarter of this year due to overall lower commodity prices and higher input material costs, Ma’aden said.
Revenue for the July to September quarter surged almost 50 per cent to 10bn riyals. The company’s quarterly gross profit for the reporting period surged more than 67 per cent to 3.57bn riyals.
“During the quarter, Ma’aden increased production volumes and continued to build the platform to deliver on our ambitious growth targets. Our focus is to deliver long-term growth and we remain on track for a record year, underpinned by the company’s strong cash generation, diversified operations, and global customer base,” Robert Wilt, chief executive of Ma’aden, said in separate statement.
“This has mitigated the impact of external pressures in Q3 … which have already started to normalise in Q4."
Looking ahead, Ma’aden remains bullish and said it will remain focused on developing operations to “deliver sustained, market-leading growth while establishing mining as the third pillar of the Saudi economy”.
Ma’aden said a 22 per cent drop in technical services expenses and “higher income from time deposits, [rising] 7.5 times due to increased investments placed and deposit rates”, contributed to quarterly net profit.
Higher other non-operating income that rose by 8.2 times due to one-off insurance claim income of 195m riyals against limited fire incident at MPC’s Ammonia plant in the second quarter of last year also boosted net income, Ma’aden said in the bourse filing.
For the nine-month period, Ma'aden's net income surged more than 164 per cent an annual basis to 8.3bn riyals. Sales jumped almost 69 per cent 30.8bn riyals during the period.
Ma’aden, which is majority-owned by the kingdom’s Public Investment Fund, is central to Riyadh’s economic diversification strategy. The expansion of the industrial and mining sectors is one of the key objectives of the kingdom’s Vision 2030 agenda.
The mining law to boost foreign direct investment in the sector, which came into effect last year, is expected to help the Arab world’s largest economy explore mineral resources worth about 5 trillion riyals and tap into gold reserves with about 20 million ounces, Invest Saudi said last year.
Earlier this year, Ma’aden signed a deal to build the world’s largest solar-powered steam plant to be used to refine bauxite into alumina, as part of its expansion strategy.
In April, Ma’aden and Emirates Global Aluminium, the UAE’s biggest industrial company outside the oil and gas sector, agreed to extend a pact to collaborate on greener aluminium smelting technology as part of their push to boost sustainable production.
The agreement extends an initial pact signed in 2018 and allows companies to jointly explore and develop new aluminium smelting technology with lower greenhouse gas emissions, they said at the time.