08 October 2013 16:44 [Source: ICIS news]
LONDON (ICIS)--Saudi Arabian Mining Company (Ma'aden) on Tuesday posted a sharp rise in third quarter net profit to Saudi riyal (SR) 1.431bn ($381.5m, €282.3m) that was entirely due to the "receipt of contractual dues" from its joint venture partners in a new $7bn fully-integrated phosphate manufacturing facility.
Despite a fall in ammonia, diammonium phosphate (DAP) and gold prices during the 13-week period ended 30 September, the company saw its net profit more than triple year on year, and rocket from just under SR 41m in the previous quarter thanks to the SR 1.44bn it received from Mosaic and Saudi Basic Industries Corporation (SABIC) towards the massive Wa'ad Al Shammal (Northern Promise) phosphate project.
Third quarter gross profit fell by nearly 45% year on year to SR 396.5m, but was up almost 54% quarter on quarter. This trend was also reflected in the firm's operational profit which slumped by 80% year on year to SR 97.6m, but climbed by 19% quarter on quarter.
For the first nine months of 2013, net profit surged year on year to SR 1.711bn from SR 685m in the January to September period of 2012.
In a brief statement released to the Kingdom's stock exchange, Ma'aden attributed the rise in quarterly net profit to "the receipt of contractual dues from joint venture partners i.e. Mosaic and SABIC in the amount of SR 1.44bn as a result of the shareholders' agreement to develop jointly a fully integrated, world-class phosphate production facility ... in spite of the decline in gold prices, as well as the decline in prices and quantities of both DAP and ammonia".
Under ambitious plans announced earlier this year, Ma'aden will own 60% of the new phosphate venture, with Mosaic having a 25% stake and SABIC retaining 15% ownership of the greenfield project.
The majority of the project will be created at Wa'ad Al Shammal Minerals Industrial City in the north of the Kingdom, but additional facilities will be built at Ras Al Khair Minerals Industrial City, which is located on the east coast.
The project is being described as a highly cost-efficient operation and is expected to have an annual capacity of 3.5m tonnes of finished phosphate. Officials anticipate that operations will commence in late 2016.
($1 = SR 3.75, $1 = €0.74)
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