Maaden Q1 net profit slips 35.3% to SR168.9m

18/04/2016 05:14 AST

Saudi Arabian Mining Co. (Maaden), the Gulf's largest miner, posted a 35.3 percent fall in first-quarter net profit on Sunday, but still beat analysts' forecasts. The firm made a net profit SR168.9 million ($45.04 million) in the three months to Mar. 31, it said in a bourse statement. This compares with a profit of SR260.9 million in the corresponding period of 2015.

The average estimate of three analysts polled by Reuters was for a quarterly profit of SR1.13 million.

It attributed the results to a 17 percent drop in revenues because of lower commodity prices for all its products — year on year, average prices for ammonia and DAP dropped 30 percent and by 25 percent for aluminum, where overall sales also fell.

This negative impact was partly offset by a 16 percent reduction in cost of sales through lower raw material costs and the impact of an ongoing initiative to cut operating expenses. In October, Maaden's chief executive told Reuters his firm was reviewing its spending in the wake of low commodity prices.

Maaden, which operates in gold, aluminum and phosphates, is a key pillar in Saudi Arabia's plan to diversify its economy away from hydrocarbons.

The firm had reported a loss or falling profits in the preceding three quarters on lower products prices but it has weathered tough conditions better than some of its global peers because it has low production costs.

This advantage has been eroded somewhat by changes to energy and gas feedstock prices announced by the government in December: This would reduce Maaden's profit in 2016 by around SR120 million, the firm has said.

Arab News