Ma'aden, Saudi Arabia's premier mining company, has announced a remarkable 160 per cent increase in profitability, achieving a net profit of SR2 billion ($532 million) for H1 2024 compared to the same period in 2023. The significant growth, highlighted in a statement on the Saudi stock exchange Tadawul, was fuelled by a notable rise in sales volumes, particularly in primary aluminium and gold, which contributed SAR 218 million to Q2 2024—a 3 per cent increase year-on-year.
The company's net profit for Q2 2024 surged by 192 per cent, amounting to SAR 673 million, compared to the same quarter last year. This robust financial performance was underpinned by lower raw material costs, reduced depreciation expenses, and a series of one-off financial adjustments that further boosted profits.
A key contributor to this profit spike was an insurance claim of SAR 469 million related to the relining of pots in Ma'aden's smelter plants. Additionally, the absence of a SAR 192 million severance charge, which had negatively impacted the previous year's profits, further uplifted the company's bottom line.
Despite the positive results, the rise in net profits was moderated by several challenges. The company's revenue was impacted by a fall in commodity prices that affected most of the company's products, except gold and alumina. Furthermore, higher corporate income taxes and zakat obligations offset some profit gains.
Saudi Arabia's corporate income tax rate is 20 per cent of the net adjusted profits. Further, Zakat is charged on the company's Zakat base at 2.5 per cent. (In Saudi Arabia, Zakat is a mandatory charitable contribution collected by the government and used to help the poor and needy.)
The company is also advancing its sustainability initiatives by planning a new aluminium recycling plant at Ras Al-Khair. Additionally, the successful completion of Ma’aden’s investment in Vale Base Metals through its joint venture, Manara, marks a significant achievement, strategically positioning the company to capitalise on the increasing demand for green metals.
Bob Wilt, CEO of Ma’aden, said, “We delivered a strong first half of 2024, demonstrating our ability to realize the benefits of operational efficiencies in a stable environment.”
“Our large-scale Phosphate 3 project is progressing, with construction underway, and we are moving forward with a new aluminium recycling plant at Ras Al-Khair.”
“Additionally, the successful completion of our investment in Vale Base Metals through Manara is set to increase our exposure to green metals.”
“Our strategic partnerships and technology-led innovation programs are fast-tracking mineral discoveries through the world’s largest greenfield exploration program of its kind."
Ma’aden reported net revenues of SR14.53 billion for H1 2024, reflecting a modest decline of 3.19 per cent compared to the previous year. Lower commodity prices primarily drove this decrease, partially offset by increased sales volumes of primary aluminium and gold.
Responses
