Saudi food company Almarai posts 14% rise in first-quarter profit

Saudi food company Almarai reported 383 million riyals ($102.13 million) in net profit for the first three months of 2020, a rise of 13.99% versus 336 million riyals for the same quarter last year.

The company said in a stock exchange filing on Sunday (Apr 5) the increase was led by revenue growth in foods, long-life dairy and poultry, with all three segments recording double digit growth year-on-year.

Almarai said all its geographies reported positive growth except Oman, where it met with heavy dairy competition that resulted in lower sales year-on-year.

Overall, the gross profit increase of 7.7% was lower than revenue growth due to higher input costs for juice, alfalfa and labour, said Almarai.  

Higher labour costs also hit selling and distribution expenses that went up 47 million riyals, or 8.3%.

POULTRY LEADS

Poultry was Almarai’s best performing segment for the first quarter. Profits for poultry rose by 72.4% driven by revenue growth of 11.8%.

This was supported by higher retail sales and higher pricing yield in the food service segment.

Bakery saw an increase of 20.9% in profit, primarily due to higher sales and leveraging of economies of scale, said the company.

Dairy and juices suffered, managing only a 1% growth in profit. Almarai said this was due to higher bad debt provision especially for expected losses in the food service channel, as well as higher imported alfalfa cost and higher labour costs.

Almarai competes in several F&B sectors including dairy, juices, bakery, and poultry.

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