Saudi’s Maaden profit drops 83% on high debt costs

Pexels/Tom Fisk

Saudi state-owned mining company Maaden reported an 83 percent year-on-year drop in net profit to SAR1.6 billion ($426 million) in 2023 as a result of higher borrowing costs and lower income from joint ventures.

Revenue fell 27 percent year on year to over SAR29 billion ($7.7 billion) due to lower prices for all commodities except gold.

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“Maaden made important operational and strategic progress in 2023 across all parts of the business,” CEO Bob Wilt said in a statement to the Saudi stock exchange.

“We generated record annual phosphate production, as well as strong volumes across our business, which mitigated the impact of lower commodity prices in the year.”

Maaden made progress with strategic projects, such as Phosphate 3 and completed the final commissioning at Mansourah-Massarah, contributing to an increase in its future phosphate and gold production.

“Maaden is undertaking one of the world’s largest exploration programmes, to unlock the $2.5 trillion of mineral endowment in the kingdom,” said Wilt. “We expect to aggressively expand our exploration activity in 2024.”

Maaden turned a profit in the fourth quarter of 2023 of SAR 890 million, compared with a loss of SAR83 million a quarter earlier. Revenue rose 29 percent quarter on quarter to SAR8.04 billion.

With gold production ramped up at the Mansourah-Massarah site, the company expects to achieve nameplate capacity – the theoretical output registered with the relevant authorities – this year.

Early construction works are also under way at the Phosphate 3 complex project, which Maaden says will add more than 1.5 metric tonnes of production a year once completed.