Ma’aden makes its largest ever debt repayment of $800m 

Ma’aden makes its largest ever debt repayment of $800m 
The early repayment represents about 7 percent of Ma’aden’s consolidated debt (File)
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Updated 18 July 2023

Ma’aden makes its largest ever debt repayment of $800m 

Ma’aden makes its largest ever debt repayment of $800m 

RIYADH: A debt of SR3 billion ($800 million) was repaid by Saudi Arabian Mining Co., also known as Ma’aden, in what was its largest ever repayment ever as part of a strategy to improve the firm’s capital performance. 

According to a company press release, the repayment was carried out by its subsidiary Ma’aden Wa’ad Al-Shamal Phosphate Co. 

Located north of Saudi Arabia, MWSPC is one of the world’s largest phosphate production complexes, contributing to 50 percent of Ma’aden’s overall phosphate production. 

The release stated that the early repayment, representing about 7 percent of Ma’aden’s consolidated debt, was a strategic move aimed at reducing finance costs and is part of the company’s deleveraging strategy. 

This prepayment also aligns with Ma’aden’s recently announced capital allocation framework, reinforcing its commitment to disciplined and sustainable capital management that supports its ambitious vision and growth plans. 

Launched in 2020, Ma’aden Transformation Program has been looking at new ways of working toward delivering value for customers, investors and stakeholders.  

Since then, the company has already saved hundreds of millions of dollars by applying these cost management initiatives. 

Ma’aden’s phosphate business has seen significant growth over the years, becoming the world’s second-largest exporter of phosphate fertilizer in just a decade. 

In February, the metals and mining behemoth also reported a surge of 87 percent in its net profits for 2022, driven by higher sales and higher commodity prices. 

It posted SR12.13 billion in net profit at the time.   

Earnings before interest, tax, depreciation and amortization increased 51 percent at the end of the reporting period to more than SR16.68 billion. 

It also booked record sales of SR40.28 billion, up 50 percent. 

Long-term borrowing and net debt declined by 12 percent and 34 percent, respectively, from December 2021.   

However, the company’s fourth-quarter net profit declined by 53 percent to SR1.27 billion riyals, dragged down by higher depreciation, taxes and finance charges due to higher interest rates globally. 

Ma’aden also made progress on its health and safety record, recording its safest year through further improvement in the downward trajectory of the all injuries frequency rate metric. 

The AIFR is the number of injuries per 1 million hours worked. Companies use the measure to evaluate their health and safety performance.

Saudi Arabia welcomes global players in AI to ‘set up shop’ in Kingdom: minister

Saudi Arabia welcomes global players in AI to ‘set up shop’ in Kingdom: minister
Updated 28 sec ago

Saudi Arabia welcomes global players in AI to ‘set up shop’ in Kingdom: minister

Saudi Arabia welcomes global players in AI to ‘set up shop’ in Kingdom: minister

RIYADH: Saudi Arabia has “a lot to offer” global players in the artificial intelligence sector looking to set up shop in the Kingdom, a top minister has insisted. 

Speaking during the World Economic Forum’s 15th Annual Meeting of the New Champions, also known as the Summer Davos, which opened in northeast China’s coastal city of Dalian on June 25, Faisal Al-Ibrahim, Saudi Arabia’s minister of economy and planning, affirmed that Saudi Arabia is focused on ensuring that the global transition toward these emerging technologies occurs equitably.

The Kingdom is making significant strides in the world of artificial intelligence in pursuit of its ambitious initiatives to position Saudi Arabia as a global leader in the field.

The National Strategy for Data and Artificial Intelligence, launched in 2020, is a cornerstone of these efforts, seeking to attract $20 billion in investments by 2030 and cultivate a workforce of 20,000 AI and data specialists.

“One thing we’re really keen on and we’ve been working with the forum recently on is global governance. The Kingdom recently joined the artificial intelligence governance alliance, we specifically launched an inclusivity initiative,” he said.

Highlighting the role that AI can play in either easing or alleviating global disparities, he added: “If AI isn’t going to be accessible by developing cultures or the whole world all together, the gap we have is from an economic point of view, from a capability point of view.

“Institutional capabilities are the reasons why economies become more complex, the reason why countries perform better, one of the main reasons, and if AI comes in and isn’t really accessible by everyone, then that is really a big challenge and can even exacerbate the challenges we live in.”

Featuring the theme “Next Frontiers for Growth,” the event, held from June 25 to 27, is gathering some 1,600 leading figures from the public and private sectors across nearly 80 countries and regions to jointly explore new drivers and pathways for global economic growth.

This year’s forum covers multiple key pillars, including “A New Global Economy, China and the World,” “Entrepreneurship in the Age of AI,” and “New Frontiers for Industries,” as well as “Investing in People,” and “Connecting Climate, Nature and Energy.”

In a dialogue session entitled “What do we expect from future growth?” Al-Ibrahim discussed the rapid growth of non-oil activities in Saudi Arabia since the launch of Vision 2030.

He said: “The Kingdom achieved the fastest economic growth rate for the year 2022 at 8.7 percent, and non-oil activities achieved 5.6 percent, and even today, the growth of non-oil activities remains strong, as non-oil activity constitutes 51 percent of the real gross domestic product. The Kingdom’s non-oil economy is larger than its oil economy.”

At the conclusion of his participation, the minister stressed the necessity of developing a comprehensive and integrated approach to addressing worldwide economic challenges, noting that by adopting international cooperation, innovation, and comprehensive solutions, the global community can effectively address some of these obstacles and mitigate their severity.

Bahrain’s NBB hires Goldman Sachs to explore merger worth $2.43bn

Bahrain’s NBB hires Goldman Sachs to explore merger worth $2.43bn
Updated 25 June 2024

Bahrain’s NBB hires Goldman Sachs to explore merger worth $2.43bn

Bahrain’s NBB hires Goldman Sachs to explore merger worth $2.43bn

RIYADH: Bahrain’s national bank appointed Goldman Sachs as a financial adviser for its negotiation with top banking institutions regarding a potential merger deal between the two, a disclosure showed.

According to a statement by the body on the country’s stock exchange, National Bank of Bahrain – which currently holds a market capitalization of $3.25 billion – is in the process of appointing an advisor to conduct due studies and diligence related to its merger with rival Bank of Bahrain and Kuwait, known as BBK, which has a valuation of $2.43 billion.

The potential deal coincides with the recent surge of mergers and acquisitions in the region, where businesses and financial institutions within the Gulf Cooperation Council have increasingly favored pooling their resources to achieve operational efficiency and maximize profits.

In Saudi Arabia, for example, the total volume of mergers and acquisitions deals during the first quarter of 2024 reached $955 million, with the chemicals sector accounting for 52.4 percent of the total. 

NBB also appointed Freshfields Bruckhaus Deringer, a leading international law firm, as a legal advisor for the deal, according to the disclosure while BBK announced the selection of Citigroup Global Markets as its financial advisor.

This continues a trend in the region’s banking sector. Last year, Oman’s second-largest financial institute, Bank Dhofar, pursued a merger with its smaller rival, Ahli United Bank, creating a lender with just under $20 billion in assets.

These deals come as a testament to global rating agency Moody’s expectation in March of last year that banks in the GCC region will witness a rise in M&A activity, enabling future synergies and oil revenue divergences in the area. 

“Consolidation among GCC region banks brings scale to support the diversification of Gulf economies away from oil and benefits in revenue and cost synergies,” said Francesca Paolino, an analyst at Moody’s. 

The rating agency noted that this development would occur despite the region’s pre-existing strong bank financial fundamentals and modest over-banking level.  

It also said that the majority of Middle East M&A activities were concentrated in Saudi Arabia, the UAE, and Egypt, which collectively recorded 563 deals or 89 percent of the region’s total volume. 

Closing Bell: Saudi main index rises to close at 11,730.77

Closing Bell: Saudi main index rises to close at 11,730.77
Updated 25 June 2024

Closing Bell: Saudi main index rises to close at 11,730.77

Closing Bell: Saudi main index rises to close at 11,730.77

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Tuesday, gaining 33.73 points, or 0.29 percent, to close at 11,730.77.

The total trading turnover of the benchmark index was SR7.09 billion ($1.89 billion) as 169 of the stocks advanced, while 54 retreated. 

Similarly, the MSCI Tadawul Index gained 0.35 points, or 0.02 percent, to close at 1.470.96.

Meanwhile, the Kingdom’s parallel market Nomu lost 354.77 points, or 1.32 percent, to close at 26,423.10. This comes as 33 of the listed stocks advanced, while 26 retreated.

The best-performing stock of the day was Al-Rajhi Co. for Cooperative Insurance. The company’s share price surged 8.96 percent to SR180.

Other top performers include Bupa Arabia for Cooperative Insurance Co. as well as Sustained Infrastructure Holding Co., whose share prices rose 6.97 percent and 5.49 percent respectively. 

The worst performer was Ades Holding Co., whose share price dropped by 2.83 percent to SR21.3.

Other fallers were Miahona Co. as well as Saudi Manpower Solutions Co. and Qassim Cement Co, whose shares declined 2.56 percent and 2.4 percent respectively.

On the announcements front, United International Transportation Co., known as Budget Saudi’s shareholders, approved raising capital by issuing new shares in order to fully acquire Al Jazira Equipment Co. Ltd., known as AutoWorld. 

According to a Tadawul statement, the decision came during the extraordinary general meeting held on June 24.

Neft Alsharq for Chemical Industries began trading on the Nomu parallel market at SR3.6 per share and a total offering size of 5 million shares.

Furthermore, the Capital Market Authority, known as CMA, approved an application submitted by Arabian Mills Co. to float and list 15.39 million shares, or 30 percent of its capital, in an initial public offering on the main market.

The prospectus will be published ahead of the subscription start date, the market regulator said in a statement.

The CMA’s approval is valid for six months from the board’s resolution date, and will be deemed cancelled if the offering and listing of the company’s shares are not completed within this period, it added.

Gulf luxury market set to soar on strong economic growth and consumer confidence: report  

Gulf luxury market set to soar on strong economic growth and consumer confidence: report  
Updated 25 June 2024

Gulf luxury market set to soar on strong economic growth and consumer confidence: report  

Gulf luxury market set to soar on strong economic growth and consumer confidence: report  

RIYADH: The Gulf region’s luxury sector is growing twice as fast as the global industry, reaching $12.5 billion in 2023, driven by strong macroeconomics and flourishing tourism, a new report revealed.      

According to the findings by luxury goods retailer and distributor Chalhoub Group, further growth is anticipated, bolstered by projected robust economic reforms set to enhance the market due to high consumer confidence.   

In its analysis of the Gulf Cooperation Council luxury retail market, the group noted a positive outlook on the regional economy, reflected in consumers’ personal finances, with 93 percent of respondents claiming to be doing well financially.     

Jasmina Banda, chief strategy officer at Chalhoub Group, said: “The region’s luxury market is expected to continue its impressive growth trajectory, driven by strong macroeconomic fundamentals, a thriving tourism sector, and dynamic consumer behavior with 53 percent of GCC residents expressing optimism about the state of the economy.”    

In Saudi Arabia, 60 percent of respondents believe the economy is stronger, with 70 percent of affluent consumers reporting that the economy has improved over the past three months.     

Despite concerns about the rising cost of living, environmental factors, and geopolitical issues, GCC consumers predominantly express positive feelings, citing hopefulness, happiness, and confidence as their top emotions, the report added.    

Banda added: “This ongoing growth and dynamism is underpinned by numerous new openings including those of “new luxury” brands such as Zimmermann in Mall of Emirates and Jacquemus in Dubai Mall, pop-ups inside and outside of malls, and events happening across the region.”    

The UAE and Saudi Arabia are boosting the region’s growth with high-end fashion, luxury watches and jewelry, and prestige beauty products witnessing significant demand.    

Fashion, valued at $5.2 billion, leads as the largest sector within the GCC luxury market, closely followed by watches at $5.1 billion, according to the report by Chalhoub Group.

The high-end fashion segment alone grew by 10 percent in 2023, significantly outpacing the global average growth rate of 4 percent, and maintained strong momentum with a 7 percent increase in the first quarter of 2024, compared to the same quarter last year.     

The ultra-high-end and high-end segments, representing 86 percent of the total luxury fashion market, saw growth rates of 11 percent and 6 percent respectively from the previous year.  

The UAE has emerged as the leading market across all high-end fashion segments, including ultra-high-end, high-end, aspirational, and accessible luxury.   

This dominance is attributed to the Emirates’ tourism sector, the influx of high-net-worth individuals, and resilient local spending.  

The beauty category within the GCC is also experiencing robust growth. The sector saw a 15 percent year-on-year increase in 2023 and a further 10 percent rise in the first quarter of 2024.  

The UAE leads the market in prestige beauty, driven by strong domestic spending and healthy tourism, with Saudi Arabia following closely.   

Within the prestige beauty market, skincare has emerged as the leader in terms of growth, achieving a 30 percent increase.   

Mid-range and limited-distribution brands were the fastest-growing segments within skincare, while high-end and prestige brands grew at a slower pace.  

Fragrances remain the most purchased beauty product by females in the GCC, accounting for 48 percent of this market, followed closely by facial moisturizers and lip makeup.   

Key factors influencing beauty product purchases include good value for money, clean ingredients, and ease of use, the report stated.  

To enhance the shopping experience, consumers emphasize the importance of personalized services and convenience.  

According to the report, two-thirds of consumers actively seek guidance for fashion purchases, whether from personal stylists or in-store sales assistants. 

“The insights provided by Chalhoub Group highlight the GCC’s pivotal role in the luxury market’s evolution. With strong performance across various segments and countries, the region is poised for sustained growth and innovation in the years to come,” the report stated.  

Established in 1955, Chalhoub Group is a Dubai-based luxury goods retailer and distributor with eight owned brands and over 300 international brands.  

EY chooses Riyadh for regional HQ amid Saudi Vision 2030 drive

EY chooses Riyadh for regional HQ amid Saudi Vision 2030 drive
Updated 25 June 2024

EY chooses Riyadh for regional HQ amid Saudi Vision 2030 drive

EY chooses Riyadh for regional HQ amid Saudi Vision 2030 drive

RIYADH: Multinational professional services firm EY has chosen to locate its regional headquarters in Riyadh, joining a growing list of international companies in the city. 

The London-based entity – formely known as Ernst & Young – has operations across the Middle East and North Africa, and will manage a workforce of 8,000 across 15 countries from its new regional headquarters in the King Abdullah Financial District in Riyadh, according to a press release. 

This comes as in December 2023, the Saudi Investment Ministry announced tax incentives for foreign companies establishing regional headquarters in the Kingdom, part of efforts to attract regional bases and diversify the economy under Vision 2030. 

During the first quarter of 2024, over 120 international firms obtained licenses to relocate their regional headquarters to Saudi Arabia, marking a 477 percent year-on-year increase. 

EY MENA stated it is set to reveal its expansive new office later this year, emphasizing that this strategic decision underscores its century-long commitment to the region and represents a significant milestone in its ongoing journey of transformative impact. 

Abdulaziz Al-Sowailim, EY MENA chairman and CEO, said: “EY is proud to be playing a part in the innovative and cutting-edge strategies that are elevating KSA’s position as a trailblazer, both regionally and globally.”  

He added: “EY has leveraged our services and solutions not only to benefit government and local businesses but to give back to the Saudi community with programs focused on entrepreneurs, education, and empowering the youth of today as they become the leaders of tomorrow.” 

EY underscored its commitment to Saudi Arabia through a recent recruitment drive that saw the appointment of nearly 1,000 Saudi professionals over the past year. This effort is supported by initiatives like the Falcon Program, which aims to advance the careers of high-performing Gulf Cooperation Council nationals, including a significant number from Saudi Arabia, it added. 

In addition to housing EY’s regional operations, the Riyadh office will feature the EY Wavespace Center, spanning over 930 sq. m.

The company said the facility will serve as a collaborative platform for clients, EY teams, and entrepreneurs, as well as students, and academia to explore technologies like artificial intelligence, blockchain, and advanced analytics. The aim is to foster innovation and tackle intricate business challenges. 

The RHQ Program, developed jointly by the Ministry of Investment and the Royal Commission for Riyadh City, supports Saudi Arabia’s Vision 2030 and the National Investment Strategy. It facilitates the growth plans of participating organizations in the region. 

The effort to attract regional headquarters to Saudi Arabia supports economic diversification goals, offering new tax incentives such as a 30-year exemption from corporate income tax and withholding tax on headquarters activities, alongside discounts and support services. 

In its quarterly report, Saudi Arabia’s Ministry of Investment revealed that the 127 permits issued in the first three months of the year underscores the Kingdom’s attractive and favorable business environment.