P.O. Box 68861, Riyadh 11537 Kingdom of Saudi Arabia Tel: +966 011 874 8123 Fax: +966 011 874 8134 www.maaden.com.sa September 2018 reports the results of the third quarter and nine months ended 30 September 2018 Financial highlights Ma aden delivered a strong set of financial results on all measures, driven by higher production, a generally positive market environment, and a sustained focus on cost control: SAR 3,396 million of revenues, up by 8% y-o-y SAR 1,265 million of gross profit, up by 52% y-o-y SAR 1,727 million of EBITDA, up by 28% y-o-y SAR 519 million of net profit up by 98% y-o-y Production highlights Ma aden s focus on operational excellence continued and delivered production gains across the business: 98K ounces of gold, up 26% y-o-y 770K tonnes of ammonium phosphate fertilizer, up 3% y-o-y 236K tonnes of primary aluminium, down 1.6% y-o-y 466K tonnes of alumina, up 28% y-o-y Project highlights The Wa ad Al Shamal Phosphate Project continues to ramp up towards full commercial operation.
Page 2 of 6 The Saudi Arabian Mining Company (Ma aden) today issued its consolidated interim financial and operating results for the third quarter and nine months ended 30 September of 2018. The Company reported an increase in profitability year-on-year attributed mainly to increased production and sales, tight cost control, and a sustained improvement in the prices of its key products. Our third quarter results continued the pattern seen in the first half of the year with commodity prices trending flat on average but with significant volatility, and with continued high raw materials prices impacting profitability. said Ma aden President and CEO, Darren Davis. The aluminium sector was particularly affected by this volatility due both to industry events as well as uncertainty caused by global political and trade issues. However, Q3 also saw the benefit of Ma aden s fully integrated aluminium production which insulated us from the sharp rise in the cost of the key raw material, alumina, in which Ma aden is more than self-sufficient. We have also announced the commencement of our third phosphate mega project which is part of our strategy to become a top three producer of phosphate fertilizers by 2025. Financial Sales reached SR3.4bn in Q3-18; slightly lower compared to the previous quarter due to mixed effect of price and volume. Sales were up by 8% compared to the same quarter last year. There was a general increase in the prices of all products except gold, offset by lower ammonia, APF and aluminium volumes. Sales for the first nine months of 2018 reached SR10.4bn; up by 17% compared to the same period of last year, driven by higher prices and the effect of net increase in volumes. EBITDA reached SR1.7bn in Q3-18; down by 5% compared to the previous quarter mainly due to the decrease in sales, combined with higher raw materials cost and operating expenses. EBITDA was up by 28% compared to the same quarter last year, mainly driven by an increase in sales which was again partially offset by higher raw materials costs and operating expenses. In the nine months, EBITDA reached SR5.5bn; up by 30% compared to the same period last year mainly driven by the increase in revenue, offset by higher materials cost and operating expenses. Net profit reached SR0.5bn in Q3-18; down by 18% compared to the previous quarter due to lower EBITDA and higher financing costs. Net Profit was up by 98% compared to the same quarter last year, mainly driven by higher EBITDA and partially offset by an increase in depreciation, financing cost and zakat and income tax. Net Profit reached SR1.9bn in the nine months of 2018; up by 94% compared to the same period of last year driven by higher EBITDA, and offset by higher depreciation, financing cost and zakat and income tax. Cash generated from operations was SR2.3bn for the first nine months of 2018; down by 2% compared to the same period last year.
Page 3 of 6 Operations Phosphate During Q3 2018, Ma aden produced 770K tonnes of ammonium phosphate fertilizer, a decrease of 2% over the previous quarter and an increase of 3% over Q3 of the previous year. Wa ad Al Shamal Phosphate Company s phosphate production ramp-up is progressing well and will soon enter commercial operation. On full ramp up, Ma aden s total production capacity will reach almost 6 million tonnes per year of phosphate fertilizers. In Q3 2018, Ma aden produced 524K tonnes of ammonia with consistent production of ammonia from both units. This is an increase of 3% over the previous quarter. Ammonia sales higher than previous quarter by 12% but slowed comparing to corresponding quarter of last year due to internal consumption in MWSPC fertilizer production. Aluminium The production of primary aluminium remained nearly the same, at 237Kmt, as the previous quarter and decreased by 1.2% over Q3 of 2017 The alumina production saw improvement over Q2 of 2018 by 2.4% and 28% over Q3 of 2017 driven by improvement in plant reliability. The aluminium rolling mill operation continues to ramp up production and is expected to enter commercial operation soon. Gold Q3 2018, gold production increased by 20 Koz over Q3 2017, mainly driven by an increase in production of Ad Duwayhi by 22 Koz. Decrease by 5 Koz over Q2 of 2018, mainly due to a decrease in mines other than Ad Duwayhi.
Page 4 of 6 Sales summary (All numbers are in 000 tonnes except as mentioned) Particulars Q3 2018 Q3 2017 % change Phosphate business Ammonium phosphate fertilizer 760 770-1.2% Ammonia MPC 119 179-34% Ammonia MWSPC 218 311-30% Aluminium business Alumina 91-100% Primary aluminium 235 239 1.6% Gold and base metals business Gold ( 000 ounces) 98 79 24% Copper 12.7 10.3 23%
Page 5 of 6 Consolidated interim statement of profit or loss for the quarter and nine months ended 30 September 2018 (All numbers are in SAR millions except as mentioned) Quarter ended Quarter ended % Nine months ended 30-Sep-18 30-Sep-17 change 30-Sep-18 Sales 3,396 3,140 8% 10,346 Cost of sales (2,131) (2,309) -8% (6,378) Gross profit 1,265 831 52% 3,967 Operating expenses Selling, marketing and logistic expenses (147) (103) 43% (387) General and administrative expenses (121) (82) 48% (307) Exploration and technical services expenses Write-off of plant and equipment (15) (23) (17) 35% (65) Operating profit 973 614 58% 3,191 Other income / (expenses) Income from time deposits 33 14 131% 81 Finance cost (491) (384) 28% (1256) Other (expenses) / income, net 2 0.4 326% (11) Share in net income of joint venture that has been equity accounted 67 38 75% 137 Profit / (loss) before zakat and income tax 583 283 106% 2,142 Income tax and (13) (3) 377% (66) Zakat expense (51) (17) 196% (173) Profit for the quarter/period 519 263 98% 1,902 Total comprehensive income/(loss) for the quarter period Earnings per share (SR) 0.35 0.21 1.34
Page 6 of 6 For further information, please contact: Ma aden Investors Relations Reem Asaad, Head, Investor Relations Tel: +966 11 874 8123 invest@maaden.com.sa About Ma'aden was formed by Royal Decree in 1997 to facilitate the development of Saudi Arabia's mineral resources and was originally wholly owned by the Saudi Government before 50% of its shares were floated on the Saudi Stock Exchange (Tadawul) in 2008. Initially Ma'aden's activities focused on expanding its active gold business which now includes five mines and over 15 million ounces gold resources. Ma'aden has also developed its activities beyond gold with the development of Ma'aden Phosphate Company, Ma aden Aluminium Company and Industrial Minerals. A number of projects are underway to make Ma aden the third pillar of Saudi Arabia s economy. For more details visit us at www.maaden.com.sa. Disclaimer This Press release contains statements that are, or may be deemed to be, forward looking statements, including statements about the beliefs and expectations of Saudi Arabian Mining Company (the "Company"). These statements are based on the Company's current plans, estimates and projections, as well as its expectations of external conditions and events. Forward-looking statements involve inherent risks and uncertainties and speak only as of the date they are made. As a result of these risks, uncertainties and assumptions, a prospective investor should not place undue reliance on these forward-looking statements. A number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements. The Company is not obliged to, and does not intend to, update or revise any forward- looking statements made in this press release whether as a result of new information, future events or otherwise. This communication has been prepared by and is the sole responsibility of the Company. It has not been reviewed, approved or endorsed by any financial advisor, lead manager, selling agent, receiving bank or underwriter retained by the Company. This communication is provided for information purposes only. In addition, because this communication is a summary only, it may not contain all material terms and this communication in and of itself should not form the basis for any investment decision. The information and opinions herein is believed to be reliable and has been obtained from sources believed to be reliable, but no representation or warranty, express or implied, is made with respect to the fairness, correctness, accuracy reasonableness or completeness of the information and opinions. There is no obligation to update, modify or amend this communication or to otherwise notify you if information, opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. You are strongly advised to seek your own independent advice in relation to any investment, financial, legal, tax, accounting or regulatory issues discussed herein. Analyses and opinions contained herein may be based on assumptions that if altered can change the analyses or opinions expressed. Nothing contained herein shall constitute any representation or warranty as to future performance of any financial instrument, credit, currency, rate or other market or economic measure. Furthermore, past performance is not necessarily indicative of future results. The Company disclaims liability for any loss arising out of or in connection with your use of, or reliance on, this communication. These materials may not be published, distributed or transmitted and may not be reproduced in any manner whatsoever without the explicit consent of Ma aden s management. These materials do not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.