Good afternoon, ladies and gentlemen. Welcome to Ma'aden's earnings call for the fourth quarter and full year of 2024. Thank you for joining us. My name is Abdulaziz Alnaim. All participants from today call will be in a listening mode only. Once the call has been concluded, a presentation and all relevant material will be available on our websites and on Ma'aden app. Please refer to our disclaimer on slide two, which applies to all of the disclosure made in today's presentation. Kindly note that all figures discussed in this presentation are in Saudi Riyal unless otherwise stated. I'm joined today by our CEO, Bob Wilt, and our CFO, Louis Irvine. They will take us through the company performance in 2024. As usual, we will open the floor for your questions at the end of the presentation.
However, the chat function is open, so please feel free to post your questions during the call. We hope to go through as much as possible today. However, if you have any follow-up questions, please email us. With that, let me hand it over to Bob.
Thank you, Abdulaziz, and thank you to everyone for joining today's call. 2024 was a standout year for Ma'aden, with record production and one of the strongest financial performances in our history. We delivered the second highest full-year revenue on record at SAR 32.5 billion, with 34% EBITDA growth year-on-year. On the back of this, our net profit grew 82% year-on-year, and we generated over SAR 11 billion in operating cash flow, giving us the flexibility to keep driving our key growth initiatives while maintaining our leverage ratio within the guided range. We are in a strong position to fund our growth ambitions and create long-term value for our shareholders. Behind these strong results is our exceptional operational performance. In 2024, we set new records across our business units.
We achieved the highest ever production and sales volume for phosphate, surpassing 2024 guidance. Gold production sales volumes also hit a record supported by all-time high prices, and our aluminum business delivered strong production as well. We are consolidating our shareholding structure across the organization. We successfully completed the acquisition of Mosaic's 25% stake in our Wa'ad Al Shamal Phosphate Company, increasing our ownership to 85% in a move that is set to expand our market and phosphate volumes. We announced the acquisition of Alcoa's stake in our upgrader. In February, we completed the acquisition of SABIC's 20% stake in Alba. These represent a big step forward in growing our aluminum footprint. Additionally, we broke ground on the first phase of our Phosphate 3 project. This strengthens Saudi Arabia's role in global food security.
We are also advancing our copper intercepts across key sites in the Arabian Shield. I'll discuss these in more detail shortly. Outside of the kingdom, we advanced our international presence with the completion of our 10% stake in Vale Base Metals through Manara Minerals, our joint venture with the PIF. We remain focused on building mining as the third pillar of the Saudi economy. For us, this means that we will be a KSA-based, globally significant, tech-enabled, people-centric mining champion. We are accelerating our efforts to unlock the $2.5 trillion mineral endowment in the kingdom, and our exploration program is one of the largest in the world and in any single jurisdiction. Our latest discoveries confirm the Arabian Shield's potential. We are positioned as a global leader in strategic and critical minerals with an established international presence.
We sell into 55 countries already and own or operate assets in nine. Technology is central to our transformation, and we are deploying advanced technology, artificial intelligence, and digitization across every step of our value chain. At the same time, a safety-first culture is integral to how we operate. We're building a global mining champion and are committed to becoming the employer of choice in Saudi Arabia. We are creating a values-based culture to develop the next generation of mining leaders. Saudi Arabia's mining sector is transforming, and Ma'aden is leading the way. Exploration is a key enabler to our long-term growth. Through partnerships and technology, we are tapping into the kingdom's rich mineral endowment to position Saudi Arabia as the world's next mining and minerals processing hub.
As you know, we have been making significant investment in our exploration program and are now seeing results. Earlier this year, at the Future Minerals Forum in Riyadh, we announced a number of significant discoveries in the Arabian Shield. We made a brand new discovery at Wadi Al Jaww. Early drilling shows wide gold mineralization at shallow depths, opening significant potential for further exploration. At Jabal Shayban, we confirmed multiple intercepts of high-grade copper and gold. In the Central Arabian Gold region, the latest drilling results at Mansourah and Massarah Deeps indicates significant high-grade mineralization below the current open pit. We confirmed intercepts extending up to 220 meters deeper than previously modeled, strengthening the case for underground expansion. We expect to make further announcements in 2025 as we continue our extensive exploration.
Accelerate exploration and deliver across our operations. We are shaping the future of mining. Safety is a fundamental part of our culture that drives everything, and in 2024, we made significant progress in reducing our serious injury frequency rate alongside our continuous improvement in our all-injury frequency rate. However, we also suffered a contractor fatality during the year. Obviously, we have more to do, and we remain fully committed to strengthening our culture and ensuring that every Ma'aden employee and contractor goes home safely. The driving force behind our success is our people. We continue to expand diversity, with females now making up more than 8% of our workforce, growing more than 4x in just the last three years. Our investment in talent is delivering results, and in 2024, over 800 individuals graduated from Ma'aden affiliated career training and educational programs.
This includes 80 graduates that completed our in-house professional development program, preparing them for leadership in mining. Our Saudization rate remains above 80%, reinforcing our role as a key employer driving national workforce development. We're improving sustainability in our operations. For example, we increased the use of recycled water versus ground water to 70% at Wa'ad Al Shamal. Safety, diversity, and talent will be critical to delivering our growth ambitions. Building on our performance in 2024, this year has started with strong momentum. We've advanced discussions with Saudi Aramco to establish an exploration joint venture. This partnership will bring together decades of Aramco data and experience with our mining expertise to accelerate exploration in the Arabian platform and strengthen our role in securing the minerals essential for future growth and development, including lithium.
Financially, we reinforced our capital structure with the successful issuance of our first international sukuk, raising $1.25 billion. Louis will give you details about this later. We enhanced our aluminum portfolio with the completion of our acquisition of SABIC's 20% stake in Alba. This transaction firmly supports Ma'aden's ambitions of growing our aluminum business. These early milestones set the tone for the year ahead. Now I'll pass it over to Louis to talk about the financials.
Thank you, Bob, and good afternoon, everyone. We continued to build on our momentum throughout the year and delivered near record results for 2024. Revenue increased by 11%, reaching SAR 32.5 billion, our second highest reported revenue on record. EBITDA showed 34% growth year-on-year to SAR 12.4 billion. In the fourth quarter, we recorded a non-cash impairment charge of SAR 1.4 billion, comprising of SAR 1.29 billion charge against capital assets of the Ma'aden Rolling Company within the aluminum business unit. Annual capital allocation review process. We also recorded a SAR 159 million charge against goodwill in the Phosphate business unit. After the impairment charges, our adjusted net profit came in at SAR 4.3 billion compared to last year. Turning to the EBITDA bridge for the year.
As mentioned previously, we achieved strong EBITDA growth, primarily due to lower overall raw material costs. In particular, we saw a large boost from our aluminum business as our production resumed at its regular rate after the pot relining program of 2023. We also saw a strong increase in the base metals new business, record gold prices and production volumes. There were a few one-offs that we recorded during the year. Notably, we received a SAR 563 million insurance claim payment in 2024 as well as a SAR 167 million ECL provision in our fertilizer distribution network in Africa, as well as a SAR 103 million inventory obsolescence charge in our phosphate business in the fourth quarter. Moving to our cash flow for the full year.
We generated strong operating cash flows of SAR 11 billion, following strong underlying business performance, further supported by a release of working capital of almost SAR 900 million. Our largest cash outflows were linked to strategic growth initiatives, investment in base metals as well as growth and sustaining CapEx. Most of our growth capital expenditure was focused on progressing Phosphate 3 phase I. We ended the period with a cash position of SAR 15.3 billion, a slight decrease of 1.8% from 2023. Turning to the balance sheet. Our net debt decreased by 4%, largely due to the reduction of our long-term borrowings offsetting these times , which is below our target range of 2x-3x.
While our growth initiatives, including potential future investments, may impact leverage in the short term, we are committed to ensuring that our balance sheet remains robust and capable of supporting our growth plans. In Alba was closed during the first quarter. With regards to our international, Bob referred to earlier, the offering was a major success and was oversubscribed more than 9x , making it the strategy and the confidence of global investors in Ma'aden's future. Turning our attention to the phosphate business unit. In the fourth quarter, we reported record DAP production quarter on quarter. For the year, we saw a 4% increase in DAP production, close to 6.2 million metric tons, while sales volumes grew 5% year-on-year.
Strains on the production side, along with China's export restrictions, were met with increased demand from major agricultural economies. Ammonia production for the year was lower by 3%, mainly due to plant shutdowns at our Ammonia II and III plants during the year. However, ammonia production largely resumed in the fourth quarter, and volumes were up 12% sequentially. Overall, quarter-over-quarter, ammonia prices increased given supply issues. Despite the full-year EBITDA margin remained in line with higher production volumes. Turning to the phosphate EBITDA bridge. Year-over-year, higher DAP prices more than offset softer ammonia prices, positively impacting EBITDA by SAR 674 million. Overall, raw material costs were higher in this business unit, mainly due to higher gas and diesel prices announced at the start of the year. Higher DAP production volumes offset lower ammonia production and the combined volume effect positively impacted EBITDA.
The credit loss provision of SAR 167 million I mentioned earlier impacted our EBITDA. The ECL provision was reported due to a bad credit account in Africa. We are actively pursuing payment and we will reverse this, if received. Transitioning to the quarterly bridge. Stronger DAP and ammonia prices. On the cost front, we saw higher production costs in line with increased production, and as well as higher raw material prices. Additionally, we've also recognized a one-off charge of approximately SAR 100 million in an allowance for inventory obsolescence. Turning to the aluminum BU. Aluminum production was up 3% quarter-over-quarter and 10% year-over-year, reflecting continued operational improvements following the successful completion of the pot relining program, which impacted performance in 2023.
The fourth quarter saw a 44% increase in alumina prices given multiple supply chain disruptions globally, and aluminum prices were up 4% quarter-over-quarter. Sales and production volumes for flat roll product increased quarter-over-quarter and year-over-year, supported by gradual recovery in demand in the can sheet market. However, FRP premiums continued to be under pressure, resulting in a 12% lower conversion revenue for us in 2024. Alumina sales volumes increased materially due to a shipping delay in the third quarter, which was pushed into the fourth. Aluminum sales volumes stayed consistent quarter-over-quarter. Turning to the breakdown of this period's EBITDA. Year-over-year, strong primary aluminum and alumina volumes drove a significant positive impact of SAR 705 million. We also benefited from favorable raw material costs, contributing SAR 455 million year-over-year to EBITDA.
Production costs were a positive impact of SAR 97 million, primarily due to lower fixed costs and the absence of the one-off utility charge that we incurred in 2020. SAR 63 million, which was recorded during the first nine months of the year. Quarter-on-quarter, EBITDA increased by SAR 786 million, mainly due to higher volumes and partially offset by lower fixed costs. The last tranche of the insurance claim of SAR 94 million was recorded in the third quarter, which was not present in the fourth quarter, therefore impacting the sequential comparison. Moving to our base metals and new minerals business unit. The business unit recorded strong growth this quarter, with revenue increasing by 43%, supported by record gold prices and volumes as Mansourah-Massarah became fully operational during the course of the year.
EBITDA margin expanded by 13 percentage points, supported by the higher prices. Gold prices continued to show strength, with the average realized prices up 7% quarter-on-quarter to a record $2,676 per ounce. Massarah. Moving on to the EBITDA bridge. Higher gold prices and increased contribution from Mansourah-Massarah drove a significant improvement in EBITDA, reaching SAR 2.6 billion, up 7% year-on-year. This was partially offset by higher production costs and accelerated exploration activities. On a quarterly basis, EBITDA increased to SAR 915 million, driven by higher volumes and prices. I'll now hand back to Bob to take us through the outlook and conclude the presentation.
Thank you, Louis. Before I get into our expansion and capital investment plans for 2025 and beyond, let's take a look at some of the key drivers behind market fundamentals in 2025. Starting with phosphate, the market outlook remains strong. Some disruptions globally in 2024. Fundamentals remain supportive in 2025 despite trade uncertainties. Aluminum. Trade flows, given potential U.S. tariffs may impact the market dynamics. Regarding the proposed 25% tariff on U.S. aluminum imports, less than 5% of our combined aluminum sales are to the U.S. However, if U.S. metal sales are rerouted, this may disrupt trade flows and impact non-U.S. regional premiums, especially in Europe and Asia. Last year, as Louis mentioned, reaching record highs, and we expect gold prices to remain strong in 2025, supported by the same factors. Strong fundamentals across our business. We are well positioned for growth.
As mentioned, Phosphate Three is well underway. Last year, we broke ground on phase I. Construction contracts. This phase will add 1.5 million tons of annual capacity starting in 2027. phase II will follow, bringing total capacity expansion. Phosphate producer globally and the second largest. Alongside fertilizers, we are advancing our aluminum strategy. Our aluminum recycling and smelter expansion projects are currently in bankable feasibility study. We're also progressing the Ar Rjum Gold Mine, also in bankable feasibility study. Results below the open pit, reinforcing the underground expansion at the site. Executing this pipeline requires a disciplined CapEx SAR 8.5 billion in 2025, and future spend will remain in this range, pending necessary board approvals, with 70%-75% allocated to growth. As you can see, our CapEx spend aligns with our expansion plans.
Phosphate will take the largest share over the next couple of years as we ramp up Phosphate Three. Aluminum projects follow, with gold CapEx increasing from 2026. As we've discussed, 2024 was one of our strongest financial years in history. We delivered the second-highest four-year revenue on record while advancing strategic priorities that position us for long-term growth. We made record DAP and gold production, completed the acquisition of Mosaic's stake in Wa'ad Al Shamal, secured new exploration licenses, and are driving forward with our growth projects. Exploration remains central to our growth ambitions, and we are accelerating efforts across the Arabian Shield, building on promising early results. In the near term, we will complete the Alcoa transaction and further accelerate construction on Phosphate Three. Our 2025 guidance reflects our commitment to delivering on the strategy. We expect another strong year of production with increased volumes across all of our businesses.
All of our assets are currently at or above nameplate capacity, and we will continue to sweat them. We also intend to invest around SAR 8.5 billion in CapEx, with the majority allocated to growth. Our focus is clear: operational excellence with disciplined growth, all with a value-driven culture. Ma'aden is well-positioned to advance confidently into 2025.
Thank you, Bob. Thank you, Louis, for the presentation. Now, we'll open the floor for audience questions. Please raise your hand if you'd like to be unmuted and you ask your question. Until we receive hands, I have a question in the chat here to Louis. The question is: what's driving the higher cost of goods sold quarter-over-quarter?
In which business unit are you referring to?
I think it's referring to the phosphate.
Okay. Just let me unpick that for you very quickly. The higher production costs during the fourth quarter relate to volume increases. There is a volume impact of higher production, and that is about SAR 140 million. There was the inventory obsolescence writedown that we booked, which is SAR 103 million. And then we have seen raw material prices tick up slightly in the fourth quarter relative to the third quarter, around molten sulfur, of approximately SAR 100 million, that was the impact there.
We had a shutdown of the sulfuric acid plant during the fourth quarter as well, and we had to purchase some sulfuric acid to augment and provide the feedstock for the production of DAP. Just lastly, there were a number of year-end accruals that we posted. In principle, stock obsolescence, SAR 103, higher raw material prices, and the volume impact as well.
Thank you, Louis. I see, Waleed would like to ask a question from Jefferies. Please, you are unmuted. Ask your question, Waleed.
Hello. Thank you for taking my questions.
Mm-hmm.
I have two. First of all, on the DAP volumes for Q4, they seem to have come above the implied expectations from the full year 2024 guidance. What drove this, and how much of that momentum has spilled into 1Q 2025? The second one, second question is, despite prices increasing Q-on-Q across the different segments, we saw EBITDA margins remaining flat. Could you just comment on the drivers for such movement? I think, this question was partly answered in the first one, but any additional color would be appreciated.
I'll take the second one. Our EBITDA margins were up.
Yeah, on phosphate, they were held flat in 2025. I think it's the same question at the end, Bob.
Okay.
Waleed, if I understood you correctly, is it phosphate related?
Yes, mainly phosphate related. Yes. Correct.
Yeah, because as Bob was gonna say, our EBITDA margin has actually increased by six percentage points at the group level. So, as I mentioned to you, the margin was impacted by one-off adjustments. The inventory obsolescence had an impact on that. We had a shutdown at the sulfuric acid plant that had an impact on costs in the fourth quarter. Then there was obviously the production volume increase as well. But I think the inventory obsolescence largely had an impact on the margin as well. Then guidance as well.
Thank you, Waleed. Now let me move to Prateek. Please ask your question now. Prateek?
Hi.
Prateek.
Can you hear me now?
Yeah.
Yes, we can. Go ahead.
Thanks for the opportunity to ask questions. I have two. The first is on your aluminum business. Look, this is in the past couple of quarters, we have seen alumina prices increase a lot.
Your production did not increase as much. My question is, what kind of flexibility does Ma'aden have to kind of increase its production in light of very strong prices in the aluminum business? That's number one. Number two is on the gold business, right? If you look at your guidance, obviously you had a very good year in terms of gold production. If you look at our guidance, the midpoint is basically in line with what we produced in 2024. I was wondering, if Mansourah-Massarah is ramping up, is there some part of your mines where the productivity will decline, and because of which the volumes will be flat year-on-year in gold? Or how should we think about it? Thanks a lot.
I'll take the aluminum one. The refinery is running at about 103% nameplate, so not much opportunity even in light of good pricing, to ramp that up further. Expect us to be running above nameplate but not much more.
Mm-hmm. With regards to gold, Prateek, on a call earlier during the course of last year, when we spoke about guidance, I said that, you know, the way we think about, we have two large mines going forward, which is Ad Duwayhi and Mansourah-Massarah. Between those two, we're looking for 400-450 per annum, and then the short life operations 50-100. That's broadly how we derive the range. When you... With the comment I also made during the course of last year is that, Ad Duwayhi was undertaking a major pushback at that operation. That is happening over two years.
2025 will be the last year of that pushback, after which it will come back up to a more normal run rate. That's the reason guidance has remained stable for next year.
Thank you, Louis.
Thanks a lot.
Moving on to Paul from Bank of America. Paul, you are unmuted. Please ask your question.
Hi, guys. Can you hear me?
Yes.
Yes, we can. Go ahead.
Great. Thank you for the opportunity to ask questions. I have two. One is on Phosphate 3 phase I and II. Can you talk about associated CapEx, sort of the ranges of, associated with that? Second question is on your joint venture with Ivanhoe Electric. Can you talk about if deployment of Typhoon™ exploration equipment yielded any interesting results? Thank you.
You take Typhoon™, I'll just take.
Yeah, yeah. We'll get the exact numbers on what we're spending in CapEx on phase I and II for phos three. Hold on a second. For the joint venture with Ivanhoe Electric, yeah, we announced in the Future Minerals Forum very promising results from the first phases of discovery. They found copper mineralization at 1,600 m, mi, but it was a very good proof of concept. Now we're working with Taylor and the team at Ivanhoe to redeploy that to some more promising areas in the kingdom as we continue to grow the venture. Definitely the technology was proven on our terrain and expect more good results this year.
With regards to Phosphate Three, phase I, you know, our expectation of the project's capital cost is around SAR 12 billion. You know, we would expect phase II to come in below that as we benefit from the economies of scale of the infrastructure that's been developed.
Great. Thank you very much.
Thank you, Paul. Thank you, Louis. Moving on to a couple of questions on the chat. There's a question about Alba acquisition. What's your plan after that?
You recall that last year we entered into discussions on a potential merger of assets with Alba. Early this year, both sides decided to walk away from those discussions. They've got a robust growth plan, as do we. At the same time, when we were in the middle of those discussions, we decided that we would be the more natural owner of the 20% stake that SABIC owns, being that we're an aluminum player. Alba's a great company. It's a great investment. We decided to continue with that purchase, and we completed it in February. Very happy to be a minority owner in Alba now. Where that conversation goes, you know, they've been a great partner with us in cooperation, technical, safety, and talent for the last 15 or 20 years, and that will continue.
Follow-up question on the same subject. Do you have any plans to acquire SABIC shares on your phosphate plants?
Not at this time.
I don't see any other questions raised. I don't see any hands. With that, I'm gonna conclude today's call. Thank you all for attending this presentation. All material will be shortly uploaded on our website under Ma'aden Hub. If you have any follow-up questions, please share them with us via email through invest@maaden.com. With that, I conclude today's call. Thank you all for attending, and goodbye.