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Wed 19 Jan 2011 04:58 PM

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Ma'aden posts quarterly loss on tax, administration

State- controlled metals producer posts SR64.5m ($17.2m) net loss, compared with a profit of SR333.8m a year earlier

Ma'aden posts quarterly loss on tax, administration
SAUDI MAADEN: Ma’adens main focus is on mining gold (Getty Images)

Saudi Arabian Mining Co, a state- controlled metals producer known as Ma’aden, reported a fourth- quarter loss on recalculated social tax, known as zakat, and higher administration costs as the company expands in the Arab world’s largest economy.

The net loss was SR64.5m ($17.2m), compared with a profit of SR333.8m a year earlier, Riyadh-based Ma’aden said in a statement on the Saudi bourse website on Wednesday. A mean estimate of three analysts surveyed by Bloomberg had forecast SR40m profit.

A provision of SR70m has been set aside in the fourth quarter after recalculating the zakat Islamic tax components, Ma’aden said in the statement. Profit in the fourth quarter of 2009 included an exceptional SR300m paid by New York-based Alcoa for an aluminum partnership, the company said. “High administration costs due to the company’s business expansion” also added to the loss, according to the statement.

Ma’aden, whose main focus is on mining gold, is adding three new business lines, including aluminum and phosphate, to tap rising world demand for chemicals used in agriculture and the lightweight metal used to make beverage cans and aircraft.

A 75-25 joint venture between Ma’aden and Alcoa obtained loans in November and December totaling SR15.1bn to finance part of the SR28.1bn first phase of its aluminum industrial complex in Ras Al Zour. That phase, including an aluminum smelter and a can-sheet rolling mill, is due to start production in the fourth quarter of 2013.

Ma’aden Phosphate Co, a 70-30 joint venture between Ma’aden and Saudi Basic Industries Corp, the world’s largest petrochemical maker, will start commercial production in the third quarter, Ma’aden said on November 24. The SR20.6bn project will produce 2.9 million tons of diammonium phosphate fertilizer a year.

A 50-50 joint venture between Ma’aden and Sahara Petrochemical Co to produce caustic soda and ethylene di- chloride obtained a SR900m loan in November. Construction of the project will be completed in the fourth quarter of 2012, the two companies said on November 30.

Full-year loss per share was SR0.01, compared with earnings of SR0.43 a share in 2009, Ma’aden said.

Ma’aden shares retreated 3.2 percent, the most since November 24, to SR22.6 at 11:12 am in Riyadh, giving the company a market value of SR20.9bn. The stock gained 26 percent last year.