The net profit of the Saudi Arabian Mining Company “Maaden” decreased in the second quarter of this year by 91.29% to 350.9 million riyals, compared to 4.03 billion riyals in the same quarter of last year, and the net profit decreased by 16.33% on a quarterly basis compared to the previous quarter of the year The current year, which saw profits amounting to 419.41 million riyals.
The company said in a statement to “Tadawul Saudi Arabia” today, Sunday, that the revenues of the second quarter of this year amounted to approximately 7 billion riyals, compared to 11.87 billion riyals in the corresponding quarter of last year, a decrease of 41.34%.
The company stated that the reasons for the decrease in profits are due to the decrease in the average selling prices achieved for all products except gold, and the increase in general and administrative expenses, including the expected credit loss provision, by 40%.
Exploration and technical services expenses increased by 116%, the financing cost increased by 86% due to the increase in SIBOR and LIBOR rates, and the net profit of joint ventures belonging to Ma’aden decreased by 59%.
Zakat, Income Tax and Franchise Fee grew by 2% mainly due to a one-off royalty charge which was partially offset by lower Zakat and Income Tax expense due to lower profitability.
The company stated that this decrease in net profit was partly offset by the increase in the quantities sold for all products except ammonia, basic aluminum and flat rolled products, and the decrease in the cost of sales by 6% as a result of the decrease in raw material costs, which was partially offset by the increase in production costs due to the increase in sales volume.
It indicated that selling, marketing and distribution expenses decreased by 17%, income from time deposits increased by 5.1 times due to the increase in investments and the rate of return on deposits, and other non-operating income increased by 164%.
The company’s net profit declined in the first half of this year by 87.57%, to 770.36 million riyals, compared to 6.2 billion riyals in the same period last year.
The company attributed the decrease in net profit in the first half of this year to the decline in the average selling prices achieved for all products except gold, and the increase in the cost of sales by 10% due to the increase in production costs as a result of the increase in sales volume, which was partially offset by a decrease in raw material costs.
General and administrative expenses, including provision for expected credit losses, increased by 27%, and exploration and technical services expenses increased by 121%.
The financing cost jumped by 96% due to the increase in SIBOR and LIBOR rates, and the net profit of joint ventures belonging to Ma’aden decreased by 51%.
It explained that the decline in net profit was partially offset by the increase in the sold quantities of all products except basic aluminum and flat rolled products, and the decrease in selling, marketing and distribution expenses by 24%.
Income from time deposits increased by 7.1 times due to the increase in investments and the rate of return on deposits, and other non-operating income increased by 137%.
Zakat, Income Tax and Franchise Fee expenses decreased by 9% due to lower profitability which was partially offset by the one-time Franchise Fee charged.
