Saudi Arabian Mining Co profit slumps 80% in Q1

Unsplash/Albert Hyseni

• Ma’aden blamed 80% Q1 profit drop on increased costs
• Profit was SAR240m on revenue of SAR8bn
• Mining is a pillar of the Vision 2030 Saudi transformation programme

The Middle East’s largest mining and metals company has reported an 80 percent drop in net profit for the first quarter of 2023.

Saudi Arabian Mining Co, better known as Ma’aden, blamed the fall in part on increased costs related to raw materials and softer commodity prices.

It posted net profit on Monday of just under SAR420 million ($112 million) for Q1 on revenue of more than SAR8 billion. 

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Following the announcement, its share price on the Saudi Stock Exchange fell by more than 2 percent at the close of trading on Monday.

Ma’aden operates 17 mines and sites and has more than 6,500 employees and exports products to over 30 countries.

It said the cost of exploration and technical services jumped by 129 percent, while finance costs more than doubled due to an increase in interest rates in Saudi Arabia and London.

The company added that the rise in costs was partially offset by higher sales volumes in most products, apart from aluminium and gold.

CEO Robert Wilt said Ma’aden’s transformation programme meant it was “better equipped” to capture growth opportunities despite softer commodity prices in Q1, which impacted top-line performance and profitability.

Ma’aden plays a key role in Saudi Vision 2030, which places mining as a third pillar of the Saudi economy. The Saudi government believes it has unused mineral resources worth about $1.3 trillion.

In February, Saudi Arabia invited local and international mining companies to bid for licences on five exploration sites across the kingdom. The plan is to complete the licensing round by the third quarter of 2023.

Last week, Ma’aden said it bought a 9.9 percent stake in US minerals exploration company Ivanhoe Electric as part of a joint exploration venture for copper, nickel, gold and silver.