January 25, 2023

Dairy and poultry firm Almarai reports 12.5% higher net profit to US$453 million in 2022

Saudi Arabian dairy and poultry company Almarai announced a higher net profit of SAR 1.7 billion (~US$453 million; SAR 1 = US$0.27) in 2022, 12.5% higher compared to the SAR 1.5 billion (~US$399 million) announced in 2021, Arab News reported.

The Tadawul-listed company saw an increase in revenue of 18% from SAR 15.8 billion (~US$4.2 billion) in 2021 to SAR 18.7 billion (~US$4.9 billion) in 2022. The company's expansion into poultry and long-life dairy products, as well as its bakery segment, were the main drivers of the company's revenue growth.

Strong top-line growth, fueled by back-to-school and improved single-serve sales, resulted in better utilisation of existing facilities, which in turn led to higher profits for the category by leveraging economies of scale. This resulted in an increase in the bakery category profit of Almarai at SAR 116.1 million (~US$30.9 million).

Due to additional capacity that became available in the second half of the year, which led to a 10% increase in bird capacity, the company's poultry volume growth remained strong. As a result of the increase in capacity, their reported net income profitability increased from 9.3% of revenue to 9.9% last year.

The category reported an increase in annual profit of SAR 31.2 million (~US$8.3 million), but Almarai said that improvements in long-life dairy were offset by higher feed costs, more expensive dairy products, and higher transportation costs.

Other categories reported a profit of SAR 9.4 million (~US$2.5 million), driven by the strong performance in the company's overseas farming ventures, as opposed to a loss of SAR 44.1 million (~US$11.7 million) during the same period in 2021.

Comparing the fourth quarter of 2022 to the third quarter of 2022, Almarai saw a decrease in net profit of 23% but a 1.47% increase in quarterly revenue.

-      Arab News