Ma'aden's Q3 net profit drops 83.5 percent

Saudi Arabian Mining Co (Ma'aden), the Gulf's largest miner, posted an 83.5 percent fall in third-quarter net profit on lower prices for its products.

Ma'aden made a net profit of 79.9 million riyals ($21.3 million) in the three months to September 30, versus 485.4 million riyals in the corresponding period of 2014, it said in a bourse statement on Sunday, October 18. Two analysts had forecast a quarterly profit of 209 million and 265 million riyals respectively.

Ma'aden, which operates in gold, aluminium and phosphates, is a key pillar in Saudi Arabia's plan to diversify its economy away from hydrocarbons. It said earnings had suffered from a fall in average prices for all of its products, and a fall in the volume of ammonia sales.

Aluminium prices have come under pressure from a global supply glut and weak demand in top metals consumer China. Global aluminium production was up 10 percent year-on-year in August, according to the International Aluminium Institute.

Ma'aden also cited a rise in financial charges and higher selling, marketing and logistics costs from the startup of its joint aluminium smelter with U.S.-based Alcoa, which began commercial output on Sept. 1, 2014.

Ma'aden said last month it was talking to banks to raise a loan worth up to $3 billion to refinance existing debt, confirming an earlier Reuters story. ($1 = 3.7500 riyals)