Rising funding costs hit Ma’aden’s Q2 earnings by 91%

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The net profit of Saudi Arabian Mining Co (Ma’aden) fell 91 percent in the second quarter of 2023, hit by rising funding costs and falling sales prices.

The mining major reported a profit of SAR350.94 million ($93.53 million) in the quarter to June 2023, compared to SAR4.02 billion in the same period last year, according to its financial report published on the Saudi Exchange (Tadawul).

The company reported lower average sales prices of all products except gold, a 116 percent surge in exploration and technical services expenses, an 86 percent rise in finance costs due to an increase in SIBOR and LIBOR rates and a lower share in net profit from joint ventures by 59 percent.

Net profit fell 87.57 percent year on year to SAR770.36 million in the first half, as finance costs surged by 96 percent annually.

Ma’aden will continue to focus on improving its business to support its next growth phase, said CEO Robert Wilt, adding that it needs to be more agile and responsive to deliver the next growth phase.

“We are making good progress in scaling the company’s operations, implementing a more efficient operating model and positioning Ma’aden to transform the mining sector into the third pillar of the Saudi economy,” he added.

In May, Ma’aden purchased a 9.9 percent stake in US minerals exploration company Ivanhoe Electric for $126 million as part of a joint venture exploring an area in the kingdom larger than Denmark.

Ma’aden is the largest multi-commodity mining and metals company in the Middle East. It operates 17 mines and sites, has over 6,500 employees and exports products to over 30 countries.