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Higher costs drive Saudi Arabian Mining's Q3'19 results into the red

Saudi Arabian Mining Co., or Ma'aden, swung to a loss attributable to shareholders of 92 million Saudi riyals in the third quarter, from a year-ago profit of 415 million riyals.

Sales jumped to 4.30 billion riyals from 3.40 billion riyals, but the cost of sales soared to 3.66 billion riyals from 2.14 billion riyals, leading gross profit down to 639.2 million riyals, from 1.26 billion riyals a year ago. Gold sales rose to 105,196 ounces, from 98,007 ounces a year ago.

The company also sells phosphate fertilizer, ammonia and industrial minerals, alumina and aluminum products, and copper, zinc and silver as byproducts of its gold production.

Operating profit tumbled to 269.4 million riyals, from 973.3 million riyals in the third quarter of 2018, due to higher operating expenses.

The company recorded a loss of 23 million riyals in the quarter from its share in joint ventures, compared to a year-ago profit of 66.5 million riyals, while finance costs climbed to 565.9 million riyals from 491.5 million riyals.

In the first nine months of 2019, Ma'aden swung to an attributable loss of 462.9 million riyals, from a year-ago profit of 1.57 billion riyals.

Sales jumped to 12.84 billion riyals from 10.35 billion riyals year over year, while the cost of sales soared to 11.19 billion riyals from 6.51 billion riyals.

Total depreciation and amortization charges jumped to 3.43 billion riyals, from 2.30 billion riyals a year earlier. The company's phosphate business accounted for 1.78 billion riyals of the total depreciation charges, compared to 895.3 million riyals a year ago.

As of Oct. 24, US$1 was equivalent to 3.75 Saudi riyals.