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State-owned mining giant Saudi Arabian Mining Co’s (Ma’aden) net income fell 83.1% y-o-y in 2023 to SAR 1.6 bn, according to disclosure to Tadawul. Its revenues were down 27.3% y-o-y last year to SAR 29.3 bn.
A strong 4Q performance though: The mining firm reported a 29% hike q-o-q in its bottom line to SAR 8.03 bn.
Driving the decline: Ma’aden attributed the drop in net income throughout the year to lower commodity prices except for gold and higher finance costs due to surging interest rates and lower profit share from its joint ventures. Revenues were down on the back of lower commodity prices except gold, Ma’aden said, yet said higher sales volumes of some of its products, including ammonia phosphate fertilizer, alumina and gold helped offset the drop in sales.
Significant milestones of the year:Ma’aden said it finalized the commissioning of the kingdom’s largest gold mine Mansourah Massarah with an annual production capacity of 250k ounces of gold, according to its earnings release (pdf). It also discovered a “significant gold resource potential” south of the gold mine, the statement said. The year also saw the launch of Manara — a JV between the Public Investment Fund (PIF) and Ma’aden — which sealed an agreement with Brazilian miner Vale to grab a 10% slice of its base metals unit as it eyes a pivotal role in the global energy transition supply chains. The completion of the Vale transaction remains unchanged from a previous set date of the first quarter of this year, it said.
SABIC AGRI-NUTRIENTS-
A disappointing year for Sabic Agri-Nutrients: Sabic Agri-Nutrients’ net income fell 64% y-o-y in FY 2023 to SAR 3.7 bn on the back of lower sales, according to an earnings release (pdf). Revenue also plummeted 42% y-o-y during the period to SAR 11 bn due to lower average selling prices.
A look at Q4: Sabic Agri-Nutrients’ net income fell 55% y-o-y in the fourth quarter of the year to SAR 978 mn, while its top line was down 29% y-o-y during the same period to SAR 2.97 bn.
What’s behind the numbers? Sabic Agri-Nutrients mainly attributes its losses to a 43% lower average selling price, according to the earnings release. Industry challenges with fertilizer trade including changes in trade routes, fluctuating output from import-replacement plants, lower energy costs, and uncertainty about Chinese export policies have contributed as well, Sabic added.
What to expect in 1Q 2024: Sabic Agri-Nutrients is anticipating demand for fertilizer to grow this quarter, pushing importers to replenish their stocks and address logistical challenges on major trade routes.
But the remainder of the year looks iffy: The industry expects limitations on supply to continue throughout the year due to exports controls and gas reduction across a number of nitrogen producing regions. It said the industry was “increasingly vulnerable to Suez/Panama Canal transit disruptions that ultimately raise shipping costs and directly cut into producer netback.” The disruptions would impact seaborne ammonia, it said, warning that an ongoing shortage would lead to a shortfall in phosphate and nitrate fertilizer supplies.
