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January 20, 2014


Saudi Arabia's Almarai reports 4.3% growth in 2013 net income
 
 
 

Saudi Arabia's dairy company Almarai announced its annual consolidated financial results for the period ended December 31, 2013.

 

For the fourth quarter ended December 31, 2013, Almarai generated a consolidated net profit amounting to SAR373.3 million (US$99.5 million) an increase of 1.2%, compared to the same period last year and an decrease of 21.5% compared to the third quarter 2013. The total gross profit for the fourth quarter ended December 31, 2013 amounted to SAR984.6 million (US$262.5 million) an increase of 13.2%, compared to the same period last year.

 

The operating profit for the fourth quarter ended December 31, 2013 amounted to SAR458.2 million (US$122 million) compared to the same period last year, an increase of 4.8%. The consolidated net profit for the 12 months ended December 31, 2013 amounted SAR1,502.2 million (US$400 million) an increase of 4.3% compared to the same period last year.

 

Almarai's earnings per share (EPS) for 12 months ended December 13, 2013 was SAR2.50 (US$0.67) compared to SAR2.41 (US$0.64) for the prior year.

 

The total gross profit for the 12 months ended December 31, 2013 amounted to SAR3,951.8 million (US$1.1 billion) an increase of 12.6% compared to the same period last year.

 

The operating profit for the 12 months ended December 31, 2013 amounted to SAR1,796.6 million (US$479 million) an increase of 7.4% compared to the same period last year.

 

Net income for the fourth quarter has grown at 1.2% over 2012 due to sales that have grown strongly at 13.7% during the fourth quarter driven by accelerating growth in sales of quarter driven by accelerating growth in sales of dairy and juices, poultry and bakery by 12.8% and 32.1% and 10.8% respectively. The company has experienced increasing dairy commodity costs during the quarter which have been mitigated through an effective portfolio management resulting in a relative stable cost of sales.

 

Net income for the year has grown at 4.3% over 2012 due to the full year growth of sales (13.5%) compared to 2012 is due to strong sales performance from all products, especially dairy and juice (108%) poultry (571%) especially dairy and juice (10.8%), poultry (57.1%) and bakery (11.9%). Despite strong gross profit growth (12.6%) and tight expenditure control, the net income for the year has been restricted due to increasing depreciation and funding costs as a result of the investment programme.

 

The reason for decrease in the fourth quarter income compared to the third quarter is due to seasonal effects in the third quarter (peak summer months) and the effect of holy month of Ramadan in the third quarter. Due to the nature of Almarai's portfolio and the associated seasonality in product portfolio and the associated seasonality in product sales and consumption, Almarai believe that a comparison with the same period last year is a more relevant measurement.

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