AlJazira Cap says Maaden Q1 2021 profit beats estimates, maintains positive long-term outlook

Maaden headquarters

Saudi Arabian Mining Co. (Maaden) posted better-than-expected results in Q1 2021, said AlJazira Capital.

The mining major posted strong results in Q1 2021, backed by improved commodity prices, strong contribution from joint ventures and a decline in operating expenditure, which resulted in a robust bottom line and margins.

The company will likely continue its healthy recovery from the impact seen during the last few quarters amid the COVID-19 pandemic, the brokerage said.

Despite the Maaden’s weaker-than-expected top line and gross margin due to Maaden Phosphate Co.’s technical issues, strong commodity prices and production efficiency are the key mid-term catalysts.

The brokerage remains positive on Maaden’s long term growth, given the likely positive consequence of raising the operating rate of mostly all of the company’s plants.

Maaden is expected to post a net profit of SAR 3.048 billion in 2021, against losses of SAR 209 million in 2020.

AlJazira Capital upgraded its recommendation on the stock to “Overweight”, setting the target price at SAR 62 per share.