Saudi Arabian Mining Company (Ma'aden) - Investor Presentation - Q2 2021 Results - Tadawul
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Growing a Saudi Global
Mining Giant
Saudi Arabian Mining Company (Ma’aden)
Investor Presentation – Q2 2021 Results
10 th August 2021Frederik Michaelsen
Senior Investor Relations Advisor
2 of 40Disclaimer
This presentation contains statements that are, or may be deemed to be, forward looking statements, including statements about the beliefs and expectations of the
Saudi Arabian Mining Company Ma’aden (the "Company"). These statements are based on the Company's current plans, estimates and projections, as well as its
expectations of external conditions and events. Forward-looking statements involve inherent risks and uncertainties and speak only as of the date they are made. As a
result of these risks, uncertainties and assumptions, a prospective investor should not place undue reliance on these forward-looking statements. A number of important
factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements. The Company is not obliged to, and does not
intend to, update or revise any forward- looking statements made in this presentation whether as a result of new information, future events or otherwise.
This communication has been prepared by and is the sole responsibility of the Company. It has not been reviewed, approved or endorsed by any financial advisor, lead
manager, selling agent, receiving bank or underwriter retained by the Company and is provided for information purposes only. In addition, because this communication
is a summary only, it may not contain all material terms and in and of itself should not form the basis for any investment decision.
The information and opinions herein are believed to be reliable and have been obtained from sources believed to be reliable, but no representation or warranty, express
or implied, is made with respect to the fairness, correctness, accuracy, reasonableness, or completeness of the information and opinions. There is no obligation to
update, modify or amend this communication or to otherwise notify you if any information, opinion, projection, forecast or estimate set forth herein, changes or
subsequently becomes inaccurate.
You are strongly advised to seek your own independent advice in relation to any investment, financial, legal, tax, accounting, or regulatory issues discussed herein.
Analyses and opinions contained herein may be based on assumptions that if altered can change the analyses or opinions expressed. Nothing contained herein shall
constitute any representation or warranty as to future performance of any financial instrument, credit, currency, rate, or other market or economic measure.
Furthermore, past performance is not necessarily indicative of future results. The Company disclaims liability for any loss arising out of or in connection with your use of,
or reliance on, this communication.
These materials may not be published, distributed or transmitted and may not be reproduced in any manner whatsoever without the explicit consent of Ma’aden’s
management. These materials do not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.
Non-IFRS financial measures
Some of the financial information included in this presentation is derived from Ma’aden consolidated financial statements but are not terms defined within the
International Financial Reporting Standards (IFRS) as applied In the Kingdom of Saudi Arabia. Such information is provided as the Company believes they are useful
measures for investors. A reconciliation of this information with the consolidated financial statements is included in the presentation
3 of 40Abdulaziz A. Al Harbi
Chief Executive Officer (A)
4 of 40Ma’aden outperformed both, peers and the market
Relative Share Price Performance (indexed to 100)
Ma’aden 2019 Equity
increase (Debt for Annualized return since the IPO
300%
Ma’aden 2014 Equity swap) (in percent)
Rights issue
250 M Share Ma’aden 11.6%
250%
Mining Giants1 9.5%
200%
Pure Players2 8.2%
150% Saudi INDEX 4.1%
Ma’aden
IPO
100%
Absolute return in Q2 2021
(in percent)
50% Ma’aden 24%
Absolute return in H1 2021
0%
(in percent)
Ma’aden 75%
TASI Mining Giants1 Pure players2 MAADEN
1 Includes Anglo American, BHP, Glencore, Rio Tinto, Vale, Vedanta 2 Includes Aluminum Corp of China, Rusal, Mosaic, Phosagro, Barrick, GoldFields, Newmont
5 of 40Health, Safety, Security & Environment
(HSSE)
6 of 40EHSS Performance
Ma’aden compares favorably with peers
All Incidents Frequency Rate - AIFR Benchmarking
1.00 1.00
0.80 0.80
0.60 0.60
0.37
0.40 0.31 0.40
0.27 0.30
0.22
0.17
0.20 0.14 0.20
0.00 0.00
2017 2018 2019 2020 2021-Q1 2021-Q2 2016 2017 2018 2019 2020 2021
(Rolling)
Ma'aden Contractor Combined Ma'aden ICMM Newmont
Rio Tinto Barrick BHP
AIFR: Recordable Injuries X 200,000
Manhours worked
7 of 40Q2 2021 Update
8 of 40Q2 2021 - Financial Performance Update
Ma’aden recorded a net profit of SR1,349mn in Q2
• Sales was SR6.1bn Q2; up 12% q-o-q, due to higher commodity prices of all products, partially offset by the decrease
in sales volumes of all products, except Phosphate and Alumina. Sales was up 52% y -o-y; due to higher prices of all
products, partially brought down by lower volumes of Ammonia, Gold and Alumina.
• EBITDA was SR2.8bn in Q2; up 25% q-o-q, mainly due to higher commodity prices despite lower volumes and higher
operating expenses. EBITDA up 157% y-o-y, due to higher sales, lower G&A and exploration, despite higher raw
material prices and selling & marketing expenses.
• Net profit was SR1.35bn in Q2; up 59% q-o-q, mainly due to higher EBITDA combined with lower finance charges and
depreciation. Compared to net loss of SR0.73bn in Q2-20, mainly due to higher EBITDA, higher share in JV net income
and lower finance cost, partially offset by higher selling & marketing, zakat & income tax and lower income from time
deposits.
• Cash generated from operations was SR1.9bn; up 39% q-o-q.
• Working capital was SR5.6bn at the end of Q2; up 10% q-o-q due to higher inventories and receivables, partially offset
by higher payables.
9 of 40Q2 2021 - Production Update
Ammonia and Gold production down; Phosphate and Alumina production up
• Ammonium Phosphate production was 1,407kt (up 31% q-o-q and up 16% y-o-y)
• Ammonia production was 359kt (down 28% q-o-q and down 36% y-o-y)
• Aluminum production was 249kt (down 3% q-o-q and down 1% y-o-y)
• Alumina production was 489kt (up 11% q-o-q and up 14% y-o-y)
• Flat Rolled Products production was 68kt (down 7% q-o-q and down 1% y-o-y)
• Gold production was 80koz (down 18% q-o-q and down 30% y-o-y)
• Copper production was 16.5kt (down 1% q-o-q and down 3% y-o-y)
10 of 40Unplanned shutdowns in Q2 2021
Issues caused by the fire on May 2021 to be resolved in Q3
Unscheduled shutdown in Ammonia (MPC)
• Leaking tubes in the reformer convections section
• Duration was 18 days
• Repairs completed on May 14th 2021
Fire at MPC on May 20th
• Announced on the Tadawul stock exchange
• Duration in Q2 was 41 days
• Repairs ongoing; to be completed in Q3
11 of 40Market Prices & Outlook
12 of 40Phosphate & Ammonia Prices
Both, Phosphate and Ammonia prices continued to rise
$600 $600
$550
$500
$500
$400 $450
$400
$300
$350
$200 $300
$250
$100
$200
$0 $150
DAP Ammonia
(Avg. KSA FOB) (Avg. ME FOB)
13 of 40Aluminum & Alumina Prices
The spread between Aluminum and Alumina widened further
$2,500 $650
$600
$2,300
$550
$2,100 $500
$450
$1,900
$400
$1,700 $350
$300
$1,500
$250
$1,300 $200
LME Cash Aluminum Price Alumina Price Index (API)
14 of 40Gold & Copper Prices
Gold slightly up, the Copper rally came to an end
$2,000 $11,000
$1,900
$10,000
$1,800
$1,700
$9,000
$1,600
$1,500 $8,000
$1,400
$7,000
$1,300
$1,200
$6,000
$1,100
$1,000 $5,000
Gold in $/oz Copper in $/kt
15 of 40Yaser A. Barri
SVP, Finance & Chief Financial Officer (A)
16 of 40Q2 2021 - Financial Performance
17 of 40Q2 2021 - Consolidated Key Financial Results
18 of 40Q2 2021 Net Profit – Quarter on Quarter Comparison
Net profit in Q2 2021 up 59%, mainly due to the price effect
Movement in net profit by line items (q-o-q)
Profit / (Loss) attributed to the shareholders’ of the parent company
Profit / (Loss) attributed to minority interest
-340
13 1,349
-163
992
848
1,105
761
245
87
Net profit Price Sales vol. Finance Others Net profit
Q1-21 effect effect cost Q2-21
19 of 40Q2 2021 Net Profit – Year on Year Comparison
A net profit in Q2 2021, compared to net loss in Q2 2020
Movement in net profit by line items (y-o-y)
Profit / (Loss) attributed to the shareholders’ of the parent company
Profit / (Loss) attributed to minority interest
-87
258 -266 1,349
1,105
2,172
245
-434
-293
-728
Net loss Price Sales vol. Finance Others Net profit
Q2-20 effect effect cost Q2-21
20 of 40Q2 2021 - Consolidated Sales and EBITDA by Segment
Phosphate accounts for 52% of Group EBITDA, Aluminum for 39%, Gold for 9%
Consolidated Phosphate
vs. vs. vs. vs.
Q2-21 LY Qtr. Prev. Qtr. Q2-21 LY Qtr. Prev. Qtr.
Sales (SRmn) 6,101 52% 12% Sales (SRmn) 3,136 93% 16%
EBITDA* (SRmn) 2,750 157% 25% EBITDA* (SRmn) 1,423 326% 42%
EBITDA margin 45% 18% 5% EBITDA margin 45% 25% 8%
52% of Group EBITDA
Aluminium Gold
vs. vs. vs. vs.
Q2-21 LY Qtr. Prev. Qtr.
Q2-21 LY Qtr. Prev. Qtr.
Sales (SRmn) 2,408 47% 14% Sales (SRmn) 557 -26% -13%
EBITDA* (SRmn) 1,071 194% 24% EBITDA* (SRmn) 256 -31% -22%
EBITDA margin 44% 22% 4% EBITDA margin 46% -3% -5%
39% of Group EBITDA 9% of Group EBITDA
21 of 40Quarterly EBITDA and EBITDA margins
Record EBITDA in Q2 2021 and margins continue to rise
55%
52% 53%
50% 51%
47%
44% 45%
43% 40%
36%
33% 33% 32%
30% 29%
27%
25%
2,750
2,193
1,966 2,003
1,815 1,727
1,681
1,428 1,504 1,345 1,541 1,392 1,310 1,439 1,416 1,470
1,091 1,069
EBITDA (mn SR) EBITDA Margin
22 of 40Q2 2021 - Consolidated statement of cash flows
Healthy cash flow from operating activities
23 of 40Financial Ratios
Net debt to EBITDA ratio continues to decrease
24 of 40Q2 2021 - Operational Performance
25 of 40Phosphate & Ammonia: Production & Sales in Q2 2021
The fire in May 2021 affected Ammonia production in Q2 2021
Ammonium Phosphate Fertilizer Ammonia
1,600 600 563
1,407 1,375
1,400 498
1,209 1,239 500
1,200 1,071 1,080
1,000 400 359
336
800 300 269
600
200
400
87
200 100
0 0
Q2 2021 Q1 2021 Q2 2020 Q2 2021 Q1 2021 Q2 2020
Production (in kmt) Sales (in kmt) Production (in kmt) Sales (in kmt)
26 of 40Aluminum & Alumina: Production & Sales in Q2 2021
Alumina production increased; Aluminum production slightly down
Aluminum Alumina
258 600
256 256 489
256 254 500 441 429
254 400
252 251
300
250 249 249
200
248
67 70
246 100 42
244 0
Q2 2021 Q1 2021 Q2 2020
Flat Rolled Products Q2 2021 Q1 2021 Q2 2020
90
Production (in kmt) Sales (in kmt) 80 81 Production (in kmt) Sales (in kmt)
80 73 72
68 69
70
60
50
40
Q2 2021 Q1 2021 Q2 2020
Production (in kmt) Sales (in kmt)
27 of 40Gold & Copper: Production & Sales in Q2 2021
Gold production down, Copper production flat
Gold Copper
140 17.5
116 17.0
115
120 17.0
97 16.6
96 16.5
100 16.5
80 82 16.2
80 16.0
16.0
60 15.4
15.5
40
15.0
20
0 14.5
Q2 2021 Q1 2021 Q2 2020 Q2 2021 Q1 2021 Q2 2020
Production (in koz) Sales (in koz) Production (in kmt) Sales (in kmt)
28 of 40Updates on Ma’aden’s Projects
29 of 40Fertilizer Projects
Major capacity expansions are under way
Ammonia 3
• Expected to produce 1,1kmt p.a.
• US$1,113mn Budget
• Completion: Q4 2021 (20kmt) and full operational Q1 2022
Phosphate 3
• Expected to produce 3,0kmt p.a.
• US$4,219mn Budget
• Completion: 2025 (Phase 1) 2027 (Phase 2)
Remediation at Wa’ad Al-Shamal
• Phosphate production to improve from 2.8kmt in 2021 to 3.1kmt in 2025
30 of 40Gold & Base Metal Projects
On track to achieve the long term target of producing 1mn ounces of gold
MMGP
• Expected to produce 250k ounces p.a.
• US$880mn Budget
• Completion: Q2 2022
Mahd Expansion
• Expected to produce 250k ounces p.a.
• US$761mn Budget
• Completion: 2025
Ar-Rujum
• Expected to produce 250k ounces p.a.
• US$785mn Budget
• Completion: 2026
31 of 40Q&A
32 of 40Growing a Saudi Global
Mining Giant
Thank YouAppendix
34 of 40COVID-19 Update
100% of employees are now vaccinated
1.20
1.00
0.80 0.73
0.60
0.40
0.18
0.20
0.01
0.00
Overall Direct Contractors
Infection rate is the percentage of the overall workforce with an active COVID-19 infection.
This is calculated by the following formula:
# of Active Infections X 100 = Rate of Infection
Workforce
(The provided data included all Maaden Affiliates Employees including contractor count. The total number is approx. 25,000)
35 of 40Debt repayment profile
Scheduled debt repayment profile (in USD millions)
2,000
MIC MGBM MWSPC MBAC MRC MAC MPC Pre-Refinance Repayment
1,800
1,600
1,400
1,200
1,000
800
600
400
200
-
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
36 of 40Unplanned shutdowns in Q1
Q1 issues have been fully resolved
Unscheduled shutdown in phosphate (MPC)
• Reactor leak, but neither safety injuries or environmental damage
• Duration was 26 days
• Repairs completed on 15 March 2021
Unscheduled shutdown in Ammonia (MWSPC)
• The roof lining was damaged.
• Duration was 9 days
• Repairs completed on 16 April 2021
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