August 16, 2023

 

Saudi Arabia's Tanmiah Food Company reports strong half-year 2023 revenues

 

Saudi Arabia's Tanmiah Food Company has announced robust half-year revenues of SAR 983.1 million (~US$262 million; SAR 1 = US$0.27), marking a substantial 26.6% increase compared to SAR 776.7 million (~US$207 million) during the same period last year, driven by impressive performance across all segments, especially in fresh poultry sales, Gulf Business reported.

 

Notably, fresh poultry sales, constituting a significant 84% of total revenues, showcased a 22.2% year-on-year rise in H1 2023, surging from SAR 675.9 million (~US$180 million) to SAR 825.7 million (~US$220 million), reinforcing the company's dominant position in the poultry market.

 

Tanmiah attributed the increase in revenues to both escalating sales volumes and an expansion in production capacity. The company's food franchise operations also made a notable contribution, with revenues rising significantly from SAR 9.8 million (~US$2.6 million) to SAR 37 million (~US$9.8 million).

 

Tanmiah's impressive financial performance was further reflected in a 2.2% year-on-year growth in half-year profit, reaching SAR 32.4 million (~US$8.6 million) in H1 2023 compared to SAR 31.7 million (~US$8.4 million) in the same period of 2022.

 

Conversely, the cost of sales escalated by 26.8% year-on-year, totalling SAR 757.2 million (~US$201 million) for the first six months of 2023 compared to SAR 597.1 million (~US$159 million) in the preceding year's corresponding period. This rise can be attributed to the company's efforts in ramping up production and expanding its market reach.

 

The group's earnings before interests, taxes, depreciation, and amortization (EBITDA) experienced a significant uptick to SAR 119.2 million (~US$31.7 million) in H1 2023 from SAR 82 million (~US$21.8 million) in the prior year. This growth was largely underpinned by the robust revenue performance, which managed to outweigh the 12.7% increase in operating costs.

 

Tanmiah concluded the first half of the year with a cash position of SAR 285 million, (~US$75 million) showcasing a positive upward trend from the SAR 267.1 million (~US$71.2 million) recorded as of December 31, 2022. The company also significantly elevated its capital expenditures from SAR 41 million (~US$10.9 million) in H1 2022 to SAR 71 million (~US$18.9 million) in the current year.

 

The company's future focus involves increasing primary processing, feed milling, and hatching capacities, alongside expanding its food franchise operations. This strategic move aligns with Saudi Arabia's wider plan to invest US$20 billion by 2035 to bolster the domestic food sector and ensure food supply chain stability.

 

Tanmiah's visionary business model positions it for continued growth not only locally but also regionally and globally. The company's collaboration with Tyson Foods and the Public Investment Fund's Halal Products Development Company further underscores its commitment to fortifying Saudi Arabia's food security goals and global Halal leadership.

 

Industry reports suggest a promising future for Tanmiah as the global Halal food market is projected to experience an estimated Compound Annual Growth Rate (CAGR) of 10.8% during the period from 2023 to 2028.

 

-      Gulf Business