Saudi Arabian Mining Co. (Ma’aden), Riyadh, posted a 65% increase in net profit after zakat and tax to SAR2.10 billion (approximately $559.2 million at current exchange rates) for the third quarter ended Sept. 30, 2022, up from SAR1.27 billion a year-ago, the company reported in a Nov. 1 filing to the Saudi bourse.
The net profit figure missed analysts’ estimates, which averaged SAR2.84 million (BloombergConsensus).
Sales revenue for the quarter increased by 50% to SAR10.01 billion, up from SAR6.7 billion the previous year. The company cited higher production volumes, which were partially offset by lower commodity prices, as boosting sales revenue.
But sales revenue missed analysts’ estimates, with the average estimate at SAR10.3 billion (BloombergConsensus).
Ma’aden’s shares dropped 9.92% to SAR75.40 per share on Nov. 1 on the missed profit and sales estimates.
For the nine months to Sept. 30, Ma’aden, net profit after zakat and tax nearly tripled to SR8.30 billion, up from SAR3.14 billion in the same year-ago period.
This was coupled with a 69% jump in sales revenue to SAR30.80 billion. compared to SAR18.25 billion the previous year.
Ma’aden attributed what it described as “a robust performance” to higher average sales prices of all products in addition to a rise in sales of ammonia, ammonia phosphate fertilizer, aluminium, and industrial mineral products.
A higher share in profit from joint ventures, and higher income from time deposits also contributed to the results, the company added
“…Our focus is to delivery 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,” said Ma’aden CEO Robert Wilt.
“This has mitigated the impact of external pressures in the third quarter from lower commodity prices and higher input material costs, which have already started to normalize in the fourth quarter,” he continued.
Ma’aden said it ended trial production and officially commenced commercial production in August at its new 1.1 million mt/y Ammonia 3 plant at Ras Al-Khair Industrial City on Saudi Arabia’s East Coast. The company said in June the first shipments from the new plant had been made from the new berth (GM June 10, p. 24).
It also said in June it expected nameplate capacity at Ammonia 3 to be achieved by the end of this year.
Ammonia 3 is the first plant in Ma’aden’s ambitious Phosphate 3 project, which when built, is targeting an additional 3 million mt/y of phosphate fertilizer capacity.
Also in August, Ma’aden signed four Memoranda of Understanding (MOU) with three Indian fertilizer companies, aimed at doubling the Saudi company’s exports of phosphate products and ammonia to India starting in 2023, with plans to explore product and technology development collaboration for phosphate fertilizers (GM Aug. 26, p. 1).
The MOUs includes an agreement with Indian Potash Co. to supply phosphate products; an agreement to supply ammonia with Gujurat State Fertilizers & Chemicals Ltd.; and two agreements with Krishak Bharati Cooperative Co. Ltd. (KRIBHCO) and Coromandel International Ltd.