RIYADH: Saudi Arabia's mining company, widely known as Mines, posted a net profit of SR 2 billion ($532 million) in the first half of 2024, an impressive 160 percent growth from the same period in 2023. .
This increase in profitability was influenced by several key factors. According to the Tadawul statement, one of the main factors of this financial success was the significant increase in sales volume.
The company's strong performance in primary aluminum and gold sales played an important role in increasing revenue. Mines also benefited from the reduction of raw material costs and the reduction of depreciation costs, which further increased its profitability.
The company also saw a favorable impact from several one-time financial adjustments. An insurance claim related to pot plating at its smelters, amounting to SR 469 million, provided a significant financial cushion. In addition, Mines was positively impacted by the absence of a one-off separation charge of SR 192 million that had impacted its profitability in the prior year.
Despite these gains, net profit growth was somewhat dampened by several challenges. The general decline in commodity market prices for most mining products, except for gold and alumina, put pressure on the company's income. In addition, the company faced an increase in income tax and zakat, which offset some of the resulting profits.
Operationally, Mines continued to make significant progress in its strategic initiatives. The Phosphate 3 project, an ambitious development effort, saw progress in construction activities. Meanwhile, the company was pushing ahead with plans for a new aluminum recycling plant in Ras Al Khair, aimed at boosting its sustainability efforts. Another highlight was the successful completion of Maaden's investment in Vale Base Metals through its joint venture, Manara, which saw the company benefit from growing demand for green metals.
“We delivered a strong first half of 2024 and demonstrated our ability to realize operational efficiency benefits in a sustainable environment,” said Maaden CEO Bob Willett.
Our major Phosphate 3 project is progressing and construction is underway and we are moving forward with the new aluminum recycling plant in Ras Al Khair.
In addition, the successful completion of our investment in Vale Base Metals through Manara is set to increase our exposure to green metals.
During this period, Maaden remained committed to its strategic goals, including a focus on operational efficiency and technological innovation. The company is actively pursuing one of the largest greenfield exploration programs in the world, which is expected to drive future mineral discoveries.
“Our strategic partnerships and technology-driven innovation programs are accelerating mineral discoveries through the largest greenfield exploration program of its kind,” Willett added.
Financially, Mines reported net income of SR 14.53 billion for the first six months of 2024. This represents a slight decrease of 3.19% from the previous year, mainly due to lower commodity prices, although primary aluminum and gold sales volumes are higher. helped reduce this drop.
In terms of credit rating, Maaden's strong business profile was confirmed by Moody's Investors Service in August 2023, which assigned the company a long-term rating of Baa1 with a stable outlook. The rating reflects Maaden's sovereign credit strength and anticipated support from the sovereign wealth fund, which remains the company's majority shareholder.
Overall, the impressive performance and strategic developments of the mines underscore its commitment to leading the mining sector and contributing to Saudi Arabia's economic diversification goals, particularly in the development of mining as an important pillar of the Kingdom's industry.
