Chief Financial Officer’s Message

Despite a year of challenging global conditions for the mining industry, Ma’aden achieved key strategic and operational milestones in 2023, laying the foundations for long-term sustainable growth. During the rapid and substantial fall in commodity prices following the historic highs of the previous year, the widespread industry reaction was damage-limitation; while Ma’aden demonstrated resilience, discipline and a commitment to its mandate, with production and sales reaching record highs.

In fully aligning its goals with Saudi Vision 2030, the Company defined three key areas of strategic deployment and investment, establishing its Capital Allocation framework. This roadmap identifies Ma’aden’s principal pillars as a commitment to Saudi Arabia, investment in global mining assets, and a strong balance sheet, which not only focuses on long-term growth, but also achieves shortterm results.

Resilience in a challenging operating environment

While the overall performance of Ma’aden’s business units was solid – and with phosphates setting a new annual production volume record – the almost universal decline in prices of mined minerals and metals were beyond the Company’s control, leading to a decrease in total revenues for the year of 27% to take over 29,272 million.

Accordingly, in line with the worldwide mining industry, the Company’s net profits fell in comparison to 2022 to SAR 1,577 million, exacerbated to some extent by the temporary maintenance closure of the Aluminium and Ammonia business units. Inevitably, the drop in commodity prices and increase in raw material expenses conspired against EBITDA, which stood at SAR 9,264 million with a margin of 32%, compared to SAR 19,397 million and a margin of 48% the previous year

Debt and equity

As the largest multi-commodity mining and metals company in the Middle East and one of the top 10 global mining companies, based on market capitalization, Ma’aden’s diverse operations mitigated many of the negative market forces, creating greater stability across the cycle.

In alignment with the Company’s continuing deleveraging strategy, debt repayments played a major role in strengthening the Company’s balance sheet in 2023. Net debt was reduced by 12%, including a record SAR 3 billion prepayment – approximately 8% of Ma’aden’s consolidated debt – which contributed to the inaugural Investment Grade Credit Ratings from Moody’s and Fitch. Moody’s assigned Ma’aden a Long-Term Issuer Rating of Baa1 with a “Stable” outlook, while Fitch assigned a Long-Term Issuer Default Rating of BBB+ with a “Stable” outlook. Net debt/ EBITDA ratio remains below previous guidance of 2-3x.

Performance and progress

With the support and application of the Company Transformation program – which unifies processes through a single set of values, standards, methods and systems across the entire organization – Ma’aden’s business units implemented the new operating model, accelerating decision-making and reducing costs.

New horizons

In light of its exceptional achievements, Ma’aden will continue to aim for record gold, phosphate and ammonia production, capitalizing on exceeding nameplate capacity and the additional volumes from Phase 1 of Phosphate 3. In addition, the Company will aggressively expand drilling and ramp up production volumes at the potential gold resource adjacent to the Mansourah-Massarah mine, an opportunity with the prospect of substantial impact.

In a challenging year for the industry, Ma’aden has proved itself to be a vision-focused and mission-driven company, with the resources and strategies to further elevate its standing on the global mining stage. As always, Ma’aden continues to place Saudi Vision 2030 at the forefront of all its operations and strategies in both its short- and long-term successes, reinforcing its commitment to develop the mining sector into the third pillar of the Saudi economy.