Saudi Arabian Mining Company (Ma’aden) released results for the year’s second quarter yesterday. Profits took a staggering dive in the half as sales prices plummeted and expenses ballooned.
Net profit in the quarter totaled 350.9 million riyals, off by 91.3 percent on the year from last year’s second-quarter total of 4 billion riyals, and down 16.3 percent on the quarter from the first quarter total of 419.4 million riyals. Ma’aden said that the drop-off in profitability was on account of a fall in lower average realized sales prices, higher costs, and rising taxes.
Ma’aden’s second quarter total fell short of analysts’ expected estimated total of 577.6 million riyals.
Ma’aden saw a rise in sales across the board except for primary aluminium, flat rolled products, and ammonia. However, higher production costs, a drop in marketing expenses, greater income from deposits and a strong rise in non-operating income could not overcome a 6 percent reduction in the cost of sales.
Ma’aden Chief Executive Robert Wilt said in a press release that there is still hope in raw material pricing.
“We are beginning to see an improvement in raw material pricing and, despite the challenging market environment, remain well placed to meet the growing long-term demand for our products.”
Going forward, Ma’aden expects demand for aluminium to remain low, while ammonia prices will likely remain level as lack of supply keeps prices from falling. Gold should remain steady through the end of the year, while raw material prices will continue to decline, the company predicted.