Saudi's Ma'aden Q2 net profit falls 27%

Saudi Arabian Mining Co (Ma'aden) posted a 27 percent fall in second-quarter net profit on Tuesday, missing analysts' forecasts as higher sales by the Gulf's largest miner could not make up for lower prices for its products.

Net profit for the three months to June 30 was 270 million riyals ($72 million) versus 370.8 million riyals in the corresponding period of 2014, it said in a bourse statement.

Three analysts surveyed by Reuters had forecast on average that Ma'aden would report a net profit of 380.4 million riyals.

Ma'aden cited the falling prices for aluminium, ammonia and gold and an increase in costs from higher sales for the profit drop without elaborating.

Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later.

However, aluminium producers globally have been struggling to handle a supply glut in the market caused by increased output from China, with major producers including United Company Rusal and Alcoa forced to idle capacity to cope.

The world's smelters produced 4.892 million tonnes of aluminium in May, up almost 12 percent year-on-year, according to figures from the International Aluminium Institute. That was the fastest growth rate since 2011.

In May, a senior executive from the company said a massive aluminium smelter which Ma'aden runs with U.S. group Alcoa will produce above its initial capacity target this year.

The smelter started commercial operations last year after facing problems during the start-up phase but the project, in Ras Al Khair on the Gulf coast of Saudi Arabia, is expected to be the facility with the lowest production costs in the world -- important at a time of price volatility.

Meanwhile, spot gold prices in the second quarter of 2015 never traded above the $1,240 an ounce mark which was the minimum level in the corresponding quarter of last year. ($1 = 3.7504 riyals)

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