Rising metal prices imply direct impact on profit margins: AMAK CEO

 Geoffrey Day CEO of Al Masane Al Kobra Mining (AMAK)

The increase in copper, zinc, and gold prices had a direct impact on Al Masane Al Kobra Mining Co.’s (AMAK) profit margins, with production costs divided into fixed and variable components—fixed costs making up roughly half of total production expenses at current output levels, said AMAK’s CEO, Geoffrey Day.

In an interview with Argaam, Day stated that he does not anticipate any significant changes in production results for the second quarter compared to the first, noting that financial performance will continue to be influenced by prevailing global commodity prices.

Discussing the first-quarter results, he explained that the strong rise in profits was driven by an increase in zinc sales volumes, along with higher realized prices for copper, zinc, gold, and silver. A reduction in treatment charges for base metals also contributed, leading to an SAR 85 million increase in revenue—representing 63% growth.

Day highlighted that the gross profit margin rose to 38% in Q1 2025, up from 26% in the same period of 2024. He added that lower selling and marketing expenses—largely due to reduced shipping costs per ton—also played a role in improving the company’s financial performance.

Regarding revenue distribution in Q1 2025, Day reported the following breakdown: gold accounted for 36.9%, copper 31.4%, zinc 31.3%, and silver 0.4%.

As for sales volumes, he confirmed that production data will be published later for all investors and shareholders through the company’s website, in accordance with AMAK’s disclosure policy.

AMAK plans to launch a series of webinars to officially and regularly present its financial and production results. These sessions will also include forward-looking guidance and operational cost details, pending board approval, the CEO added.