State-owned Saudi Arabia Mining Company, also known as Ma’aden, has posted a net profit of $93.53m (SR350.9m), representing a drop of 91% from the same period last year.

According to Refinitiv data, the company’s profits fell short of analyst expectations by more than $53.3m. Its results were down significantly from 2022’s second-quarter profits of just over $1.1bn and fell 16.3% from this year’s first quarter, which saw a net profit of $111.7m.

The company attributed the drop to lower sales prices for all its products except gold, higher administrative costs, exploration and technical services expenses rising 116%, and an 86% increase in finance cost, largely due to higher interest rates.

The fall in profit comes despite overall higher sales volumes for all products except ammonia, primary aluminium and flat rolled products. It also comes after a 6% drop in the cost of sales largely due to a decrease in raw material costs.

Despite this, Ma’aden cited a record quarter for phosphate production, helping the company to solidify its position in the global fertiliser market. It also exported 25,000 tonnes of low-carbon blue ammonia to China to contribute further to low-carbon value chains.

The company also suggested a strengthening of its overall financial position, stating that long-term borrowings and net debt were down by 11% and 9%, respectively, from December last year. This includes an early debt repayment of$799.6m by Ma’aden Wa’ad Al Shamal Phosphate Company, a subsidiary company majority-owned by Ma’aden.

Robert Wilt, Ma’aden CEO, said in a statement: “We are making good progress in scaling the company’s operations, implementing a more efficient operating model and [enabling] Ma’aden to transform the mining sector into the third pillar of the Saudi economy. The steps we are taking [will ensure we become] a company fit to meet the challenges of our industry and realize the value of Saudi Arabia’s mineral endowment.”

So far this year, the company has formed several joint ventures (JVs) in an effort to expand its operations. In January, it signed an agreement with the state’s Public Investment Fund to strengthen its minerals assets, focusing particularly on iron ore, nickel, copper and lithium. In May it agreed to form an equal parts JV with US minerals and metals company Ivanhoe Electric to expand its exploration programmes, looking at gold, copper, silver and electric metals.