Maaden posts SR370.8m net profit
Maaden posts SR370.8m net profit
The miner made a net SR370.8 million ($98.9 million) in the three months to June 30, compared with SR40.98 million in the year-earlier period, it said in a bourse filing on Tuesday.
Earnings were expected to improve because of a slump which Maaden suffered in the second quarter of 2013, due to a plant shutdown and lower gold prices. But its performance exceeded the expectations of all four analysts polled by Reuters, who had on average forecast 183.8 million.
Maaden is seen as a key driver of Saudi Arabia's economic diversification away from oil exports, with its $9 billion Waad Al-Shimal project expected to produce up to 16 million tons a year of numerous phosphate products when it comes on line in late 2016.
The company cited increased sales across its product range as well as higher aluminum prices for the profit increase, which helped offset lower prices for ammonia and one of its fertilizer products.
Maaden gave no further detail. Saudi companies usually issue brief earnings statements early in the reporting period before publishing more information later.
The profit increase reverses a broadly negative earnings run for the company, which had reported declining profits in four of the previous five quarters - with the outlying quarter positive largely due to a one-off gain on a joint venture.
The company signed $5 billion of loan financing for the Waad Al-Shimal scheme last month and is set to use much of the proceeds of a $1.5 billion rights issue, plans for which were announced in May, to fund the project.
Oil up on OPEC uncertainty regarding production levels
- Saudi Arabia and Russia are in favor of raising output. Other OPEC-members including Iran have opposed this, resulting in a flurry of backdoor diplomacy ahead of the meeting
- Phillip Futures said in a note that it expected “an approximate 300,000–600,000 barrels per day (bpd) hike by Saudi Arabia and Russia collectively”
SINGAPORE: Oil prices rose by around 1 percent on Friday, lifted by uncertainty over whether OPEC would manage to agree a production increase at a meeting in Vienna later in the day.
Brent crude oil futures were at $73.78 per barrel at 0502 GMT, up 73 cents, or 1 percent, from their last close.
US West Texas Intermediate (WTI) crude futures were at $66.26 a barrel, up 72 cents, or 1.1 percent.
The Organization of the Petroleum Exporting Countries (OPEC), a producer group with top exporter Saudi Arabia as the de facto head, is meeting together with non-OPEC members including No.1 producer Russia at its headquarters in the Austrian capital to discuss output policy.
The group started withholding supply in 2017 to prop up prices. This year, amid strong demand, the market has tightened significantly, pushing up crude prices and triggering calls by consumers to increase supplies.
Saudi Arabia and Russia are in favor of raising output. Other OPEC-members including Iran have opposed this, resulting in a flurry of backdoor diplomacy ahead of the meeting.
“The actual decision by OPEC and its partners — which may not actually become apparent until Saturday — is the big one traders are watching,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
Phillip Futures, another brokerage, said in a note that it expected “an approximate 300,000–600,000 barrels per day (bpd) hike by Saudi Arabia and Russia collectively.”
US investment bank Jefferies said an increase in “the range of 450-750,000 bpd seems the most likely outcome” of the meeting, driven largely by Russia and Gulf OPEC members Saudi Arabia, the United Arab Emirates and Kuwait.
Jefferies said these increases “would essentially offset Venezuelan declines and falling Iranian exports,” but the bank warned that global “spare capacity could fall globally to around 2 percent of demand – its lowest level since at least 1984.”
That would leave markets prone to supply shortages and price spikes in case of large, unforeseen disruptions.
The other big uncertainty is potential Chinese tariffs on US crude imports that Beijing may impose in an escalating trade dispute between the United States on one side and China, the European Union and India on the other.
Asian shares hit a six-month low on Friday as tariffs and the US-China trade battle start taking their economic toll.
Should the 25 percent duty on US crude imports be implemented by Beijing, American oil would become uncompetitive in China, forcing it to seek buyers elsewhere.
Chinese buyers are already starting to scale back orders, with a drop in supplies expected from September.
“If China’s import demand dries up, more than 300,000 bpd of US crude will have to find a new destination,” energy consultancy FGE said.
“This will certainly depress US Gulf Coast prices,” it said.