Saudi food company Almarai first-quarter earnings almost flat as poultry, bakery profits slide

Saudi food company Almarai's revenue was almost flat for the first-quarter of the year compared to the same three months in 2020. 

The company said in a filing on the Saudi Exchange on Sunday (April 11) that the revenue inrease of 1.46% to 3.65 billion riyals ($0.97 billion) was driven mainly by dairy and other sales.

"Food, Poultry and Juice category were slightly lower than last year due to base effect from COVID-19 pandemic buying in Q1 2020," said Almarai.

"In terms of geographical growth, it was primarily led by Egypt and Jordan but GCC countries witnessed general market weakness due to COVID-19 restrictions and VAT impact in KSA."

Net profit grew by 0.76% to 385.9 million riyals.

Almarai said its gross profit, that fell by 1.4%, was hit by lower subsidies and higher input costs, mainly Alfalfa. 

Dairy and juice as a category reported an increase in profit by 6.5% due to contributions by Egypt, Jordan and export markets drive by higher sales. However, higher feed cost and lower subsidies for dairy continued to impact Almarai's profitability in this segment. 

Profits for bakery and poultry dropped, by 35.7% and 24.3%, respectively.

Bakery's sales were hit by school closures and an adverse mix against single serve products, said Almarai.

Poultry was impacted by lower subsidies. However, the foodservice segment performed well for poultry, added the company.

Almarai operates in its home market Saudi Arabia as well as across the Middle East. 

The company had a good 2020 in spite of the pandemic, posting a 9.5% increase in net profit to 1.98 billion riyals ($0.53 bln) compared to 1.81 billion riyals in 2019.

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