Saudi Arabian Mining Co. (Ma’aden) reported an 81% plunge in net profit to SAR0.42 billion for the first quarter ended March 31, 2023, down from SAR2.17 billion in the same prior-year earlier period.
EBITDA for the quarter was 50% lower year-over-year at SAR2.18 billion against SAR4.40 billion a year ago, with the company attributing the fall mainly to “a one-off utilities charge and higher raw materials prices.”
Revenues were off 10% at SAR8.05 billion, down from SAR8.91 billion. Ma’aden said higher ammonia and ammonium phosphate fertilizer sales volumes in the quarter versus a year-ago were offset by lower selling prices.
The company reported ammonia production in the first quarter was up by 9% over first-quarter 2022, while ammonium phosphate fertilizer production increased 35% year-over-year. However, it did not disclose production volumes or sales volumes.
Commenting on the results in May 22 media statement, Ma’aden CEO Robert Wilt said “We have increased production and sales volumes in our core Phosphates Business Unit and delivered another period of strong cash generation. This was despite softer commodity prices, which impacted our top-line performance and profitability for the quarter compared to last year.”
Wilt noted that supply-demand dynamics are now more effectively managed, while raw materials prices are easing and fertilizers and ammonia prices have normalized and are expected to remain in-range for the remainder of the year, he said.
The CEO said the company continues to make good progress to optimize existing operations and bring new projects online.
“Ammonia 3 production is ramping up towards nameplate capacity and the wider Phosphate 3 project is on track,” said Wilt.
Ma’aden is developing its ambitious Phosphate 3 project in two phases, the first of which will see the installation of an additional 1.5 million mt/y of phosphate fertilizer production capacity.
The first plant in the project, a 1.1 million mt/y capacity ammonia plant – the so-called “Ammonia-3” facility – located at Ras Al-Khair Industrial City facility, started “official” commercial production last August (GM Nov. 4, 2022), although the first shipments from the new plant were made in June (GM June 10, 2022).
For the time being, the ammonia output is being used to cover existing sales contracts and merchant sales.
In March of this year, the company signed a Support Agreement with the Kingdom’s Ministry of Investment that is aimed at accelerating the delivery of the company’s ambitious Phosphate 3 project (GM March 3, p. 1). In January, it signed an engineering, procurement, and construction management services contract with WorleyParsons Arabia Ltd. and JESA International SA for the construction of its Phosphate 3 phase 1 project (GM Jan. 13, p. 30).