RIYADH: The Saudi Arabian mining company, widely known as Madeen, has achieved a net profit of SR2 billion ($532 million) in the first half of 2024, a remarkable 160 percent increase compared to the same period in 2023.
This increase in profitability was driven by several key factors. A major contributor to this financial success was the significant increase in sales volume, according to the Tadawul statement.
The company's strong performance in primary aluminum and gold sales played an important role in increasing revenue. Ma'aden also benefited from cuts in raw material costs and lower depreciation expenses, which further boosted its profitability.
The company also saw a favorable impact from several one-off financial adjustments. An insurance claim related to the relining of vessels within its smelter plants, amounting to SR469 million, provided a substantial financial cushion. Furthermore, Ma'aden was positively impacted by the absence of severance charges of SR192 million that impacted the previous year's profit.
Despite these gains, the growth in net profit was somewhat tempered by some challenges. The overall decline in commodity market prices for most of Madden's products, with the notable exceptions of gold and alumina, pressured the company's revenues. Additionally, the company faced increased income tax and zakat, which also offset some of the profit gains.
Operationally, Madden continued to make significant progress in its strategic initiatives. The Phosphate 3 project, an ambitious expansion effort, saw progress along with construction activities. Meanwhile, the company was moving forward with plans for a new aluminum recycling plant in Ras al-Khair, aimed at increasing its sustainability efforts. Another highlight was the successful completion of an investment in Vale Base Metals through Madden's joint venture, Manara, which positioned the company to benefit from the growing demand for green metals.
“We delivered a strong first half of 2024, demonstrating our ability to realize the benefits of operational efficiencies in a stable environment,” said Ma'aden CEO Bob Wilt.
“Our large-scale Phosphate 3 project is progressing, construction is underway, and we are moving forward with a new aluminum recycling plant in Ras al-Khair.”
He said: “Additionally, the successful completion of our investment in Vale Base Metals through Manara is set to increase our exposure to green metals.”
Throughout this period, Madden remained committed to its strategic goals, including a focus on operational efficiency and technological innovation. The company is actively pursuing the world's largest greenfield exploration program, which is expected to conduct future mineral discoveries.
“Our strategic partnerships and technology-led innovation programs are fast-tracking mineral discoveries through the world's largest greenfield exploration program of its kind,” Wilt added.
Financially, Madden reported net revenue of SR14.53 billion for the first six months of 2024. This represented a slight decline of 3.19 percent from last year, mainly due to lower commodity prices, despite higher sales volumes of primary aluminum and gold. This helped reduce the decline.
In terms of credit ratings, Ma'aden's strong business profile was confirmed by Moody's Investor Service in August 2023, which awarded the company a Baa1 long-term issuer rating with a stable outlook. This rating reflects Madden's solid standalone credit strength and expected support from the Kingdom's sovereign wealth fund, the company's majority shareholder.
Overall, Madden's impressive performance and strategic advances underline its commitment to leading the mining sector and contributing to Saudi Arabia's economic diversification goals, particularly in developing mining as a key pillar of the Kingdom's industry.
