Saudi Arabian Mining Company (Maaden) (1211) Q2 2024 earnings summary

Executive summary

• Net profit surged 160% year-on-year in H1 2024 to SAR 2.01 billion, driven by improved production costs, operational efficiencies, and insurance claim benefits, despite a 3% revenue decline to SAR 14.53 billion.

• EPS increased 161% year-over-year to SAR 0.54, with net margin at 14%.

• Major strategic projects advanced, including Phosphate 3 expansion, aluminium recycling plant, and acquisition of 10% in Vale Base Metals.

• Strong segment performance in aluminium and gold, with gold output up 37% year-over-year and Mansourah-Massarah mine driving growth.

• Innovation and ESG initiatives progressed, including water recovery, waste-to-value, and digital transformation in safety.

Financial highlights

• EBITDA rose 31% year-over-year to SAR 5.91 billion, with margin up 11 percentage points to 41%.

• Cash from operations was SAR 4.2 billion, supporting investments and closing cash position of SAR 11.9 billion.

• Net debt increased 15% year-over-year to SAR 25.0 billion, with net debt/EBITDA at 2.3x, within guidance.

• Insurance claim benefit of SAR 469 million recognized, and absence of prior year one-off utility charges boosted results.

• Operating profit rose to SAR 3.63 billion from SAR 1.77 billion year-over-year.

Outlook and guidance

• FY24 production guidance: DAP 5,500–5,800 KMT, Ammonia 3,200–3,400 KMT, Alumina 1,600–1,800 KMT, Aluminium 850–1,050 KMT, Gold 450–560 Koz.

• Phosphate 3 Phase 1 to add 1.5Mt annual capacity by end of 2026; aluminium recycling plant to produce 400,000 Mt annually from 2026.

• Gold production expected to increase, with Mansourah-Massarah mine on track for 250 Koz in 2024.

• DAP prices expected to firm in H2 as China’s exports slow and India/Brazil replenish inventories.

• Sustaining CAPEX guidance for 2024 is SAR 2.5–3.0 billion; growth CAPEX is SAR 5.6–6.6 billion.