Saudi Arabian Mining Company’s (Maaden) growth trajectory is likely to be underpinned by increased production volumes from capacity expansions in its phosphate and gold segments, notably through the Phosphate 3 project, Mansourah-Massarah ramp-up, and Ar Rjum expansion, AlJazira Capital said in a report.

These initiatives are expected to bolster profitability as the company shifts focus to higher-margin segments, the brokerage said. 

“We project a revenue compound annual growth rate (CAGR) of 6 percent over 2023-2030, with EBITDA margins improving from 30.5 percent in 2023 to 40.6 percent by 2030,” the report said.

Consequently, net profit is forecasted to grow at a robust 32.2 percent CAGR over the same period.  

Maaden’s total debt stood at 36.9 billion Saudi riyals ($9.82 billion) as of September 2024, reducing from SAR 37.3 billion in 2023. 

The debt-to-equity ratio is expected to ease from 0.66x in 2023 to 0.59x in 2024 and reach 0.1x by 2030. Total debt is anticipated to decline to SAR 8.5 billion by 2030. 

The company’s strong cash flow generating ability allows it to fund expansion without stressing the balance sheet, AlJazira Capital said. 

The brokerage estimates cash flow from operating activities to increase from SAR 10.1 billion in 2023 to SAR 16.9 billion in 203E, sufficient to fund CAPEX, which is expected to average around SAR 4 billion annually. 

Moreover, free cash flow is estimated to increase from SAR 7.3 billion in 2023 to SAR 13.9 billion in 2030, AlJazira Capital said.

(Editing by Anoop Menon) (anoop.menon@lseg.com)

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