MAADEN (Saudi metals company)
Analyzing financial statements for last 5 years.
In order to study the financial situation for MAADEN Saudi Arabian Mining Company, that founded in March 1997 and became a joint stock company in 2008 by offering (462.5 million) shares for public subscription, which represented -at that time- 50% of the shares in the company which brought a large turnout to subscribers in the IPO of the company because of its high prestige in the kingdom, and the confidence of the shareholders in the company due MAADEN’s long history in the mining sector.
However, when we reviewed the last five years (2009-2013) and analyzed the company financial statements; We found that MAADEN had the ability ...view middle of the document...
I think that the most important reasons directed this net loss were: investments with (154.49) and expenses (304.39) that was a high number comparing with operating profit (89.66).
Low liquidity of 2013 with gross profit (27%) and operating profit (12%) affecting the dept or short-term loans investments that increased from (43%) in 2009 to (69%) in the same year 2013.
MAADEN has financed (49%) of its assets by long-term dept in 2013, this number increased by years from 2009 with percentage of 30%. In another hand the company used (76%) from owners equities in 2009 as the less percent in the 5 years that increased up to (224%) in 2013, indicated that the company is using speculation.
2012 has the best turnover year for inventory with sold times of (2.65) much higher than sold times of (0.86) in 2011 and a bit the same of 2013 turnover times (2.35).
While the company was’t using it A/R properly into generating sales in the first 2 years 2009,2010 (0.02) seems MAADEN kept it almost this way for the 5 years with max using times of (0.09) by 2013.
The company achieved a best growth in net profit (64%) in 2009 compared to all 5 years it was the highest, including the drop year 2010 the trend of -2% increased to (27%) in 2011 as it has achieved (28%) in 2013. But this is not a recommendation to buy MAADEN stock but this year 2013 is the best year of owning some shares and play their game as price of EPS with (19.34) times less than each pice EPS in the bast 5 years.
Finally, I will not recommend long investment as it is owed company that does’t use earnings to invest and depend on the debt and Shareholders Equity in the purchase of assets, but with the level of trust that MAADEN has from the creditors, who knows.