The largest multi-commodity mining and metals firm in the Middle East, Saudi Arabian Mining Firm ("Ma'aden" or the "Company", 1211 on the Saudi Exchange), today released its financial results for the three months ended March 31, 2023. In order to generate long-term growth in line with Ma'aden's 2040 vision and to take advantage of Saudi Arabia's mineral wealth, the company continues to drive transformation across its business and form strategic alliances.
REGULAR HIGHLIGHTS ensuring long-term growth through project execution and strategic partnerships: • A joint venture with PIF to broaden its global reach, diversify Ma'aden's product line, and ensure the supply of vital minerals for the monarchy. • Through a joint venture with Ivanhoe Electric, exploration activity will be six times faster thanks to access to cutting-edge technology. • Ongoing commissioning activities at Mansourah-Massarah, Ma'aden's largest gold project, are expected to produce an average of 250,000 ounces per year, with initial commercial production scheduled for H2-FY23. • Strategic partnerships with Shareek to support growth across Ma'aden's asset portfolio and with the Ministry of Investment to accelerate delivery of Ma'aden's Phosphate 3 mega project Lower commodity costs and one-off factors balance growth in sales volumes and solid cash generation. • Revenue of SAR 8.05 billion (Q1-FY22: SAR 8.91 billion) was driven by higher sales volumes of granulated fertilizer and ammonia offset by lower commodity prices. • Strong cash flow from operations of SAR 2.99 billion enables further 2% and 5% cuts to net debt and long-term borrowings, respectively, starting in December 2022. • A decrease in EBITDA of SAR 2.18 billion (Q1-FY22: SAR 4.40 billion), principally as a result of a one-time utilities charge and higher raw material prices, resulted in a net profit of SAR 0.42 billion (Q1-FY22: SAR 2.17 billion). Granulated fertilizer sales are up 35% year over year, and ammonia production is up 9%. Ma'aden is still committed to generating substantial long-term growth. The company's transformation program, Numu, which is assisting in ensuring Ma'aden is fully prepared to capitalize on growth prospects and promote efficiency throughout operations, continues to roll out in the first quarter. In order to accomplish this, the company has established a strong operating model that will produce operational excellence and guarantee the successful completion of important projects. The company also established substantial strategic alliances in Q1 that will greatly improve capabilities throughout the organization and support expansion from project delivery through exploration.
The dynamics of supply and demand are now better controlled, raw material costs are down, and prices for fertilizers and ammonia have stabilized and are anticipated to stay within a reasonable range for the rest of the year.
This allows Ma'aden to maintain the FY23 production and capital expenditure projections, as stated in the FY22 results, together with the successful completion of important projects that improve operational capacity.
In response to the results, Ma'aden CEO Robert Wilt said: "In the first quarter, we continued to focus on rolling out our transformation initiative to make Ma'aden a more agile, responsive firm, better able to seize growth opportunities and unlock long-term value for shareholders. In our primary phosphate business unit, we have grown production and sales volumes and generated another quarter of robust cash generation. This occurred in spite of lower commodity prices, which had an adverse effect on our profitability and top-line results for the quarter compared to the prior year.
Additionally, we have formed a number of crucial alliances that will strengthen our capacities and help us achieve our growth goals. Major growth initiatives across our Saudi Arabian asset portfolio may be accelerated with the aid of our strategic cooperation with Shareek. Our joint venture with PIF will significantly increase our exposure to top-notch worldwide potential in strategic minerals, and our partnership with Ivanhoe Electric will speed up the world's most ambitious strategic mineral exploration program right here in the Kingdom.
"We are still making good strides toward streamlining current operations and launching new ventures. Production of ammonia 3 is increasing to nameplate capacity, and the larger phosphate 3 project is on schedule. Ras Al-Khair's aluminum pot relining is going according to schedule, and Mansourah-Massarah, Saudi Arabia's largest gold project, is still on track to start producing commercially in the second half of 2023.
