Saudi Arabian Mining Co. (Maaden) is projected to generate profits of SAR 337 million in 2020, against losses of SAR 739 million in 2019, Al Rajhi Capital said in a research note.
Maaden incurred losses of SAR 277 million in the fourth quarter (Q4) of 2019 due to lower other income and higher zakat provision, missing Al Rajhi’s estimated figures of SAR 90 million.
The brokerage firm forecasted that the company’s financial performance may remain under pressure in 2020 due to weak commodity prices outlook amid uncertain global economic slowdown.
Higher costs associated with the firm’s new subsidiaries, Ma’aden Wa’ad Al-Shamal Phosphate Co. (MWSPC) and Ma’aden Rolling Company (MRC), will continue to impact margins until it reaches their respective capacities.
“The company is operationally well-positioned to achieve its long-term growth plans, given the likely positive outcome of its future projects (P3 and Mansourah/Massarah gold mines),” Al Rajhi highlighted.
Al Rajhi revised its rating to “Neutral” from “Underweight” for Maaden, with a 9% decline in share price this year and a target price (TP) of SAR 41/share.
Comments
{{DisplayName}}
{{ElapsedTime}}