Maaden has healthy balance sheet, dividend unlikely in next few years: CEO

Saudi Arabian Mining Co. (Maaden) CEO Robert Wilt

Saudi Arabian Mining Co. (Maaden) has a healthy balance sheet for the first time in a while, said CEO Robert Wilt, adding that debt levels have receded. 
 

In an interview with CNBC Arabia, the top executive indicated that the company saw a full turnaround last year, during which it focused on the balance sheet. This is by investing cash in projects and generating as much liquidity as possible. 
 
Maaden has reduced inventory by improving operations across all of its plants. This is in addition to ensuring that products are available in the markets and meeting demand as quickly as possible, Wilt said. 
 

He added that Maaden is working to repay loans, as it accelerated the repayment of loans worth SAR 3 billion, to reduce its exposure to loans amid high interest rates. It also seeks to ensure that there is a strong balance sheet throughout the economic cycle, and that it has discipline in cash allocations, in terms of spending and distributions on various projects. 
 

Wilt also stated that current liquidity will be used in the short term, expecting that there will be no cash dividends in the next few years. 
 

Moreover, Maaden intends to increase production capacity by 50%, said the CEO, expecting an increase in production in 2026 and 2027. 
 

He further said that the company is closely monitoring supply-chain disruptions and geopolitical issues, such as the Russia-Ukraine war and the reopening of China’s economy after the lifting of the zero-COVID policy in China, and is keen to open more markets. He also noted that Maaden is still witnessing continued demand for its aluminum and phosphate products. 
 

Maaden is among the companies in the world with the lowest cost of aluminum and fertilizers. The firm still has healthy margins and can pump money into the main operations due to the low costs, Wilt stated. 
 

Furthermore, Maaden is working on more exploration and increasing its spending on it by five times in the current year. It teamed up with major international players in terms of technology and extraction capabilities. 
 

According to data compiled by Argaam, Maaden’s profit surged 78% year-on-year (YoY) to SAR 9.31 billion in 2022. Q4 profit amounted to SAR 1.01 billion. 
 

Maaden's board of directors earlier recommended withholding dividends for 2022 to fulfill the company's need to finance its strategic growth plan and partnership projects. 
 

The board of directors recommended, on Feb. 12, increasing capital by 50%, through a one-for-two bonus share distribution. The capital hike will be financed through capitalizing SAR 12.31 billion from the statutory reserve and retained earnings.