Despite declining sales in Saudi Arabia and the United Arab Emirates, it has grown in Egypt, Jordan, and other markets.
Saudi Almarai Company, the largest dairy company in the Middle East, announced a slight increase in first-quarter net income on the back of higher revenues in the export market.
Kyiv. Ukraine. Ukraine Gate – April 12, 2021 – Entrepreneurs
In a statement to the Saudi Tadawul Stock Exchange, Almarai said that the net profit attributable to the company’s shareholders for the three months until the end of March jumped to 385.9 million Saudi riyals ($ 102.9 million), up from 383 million riyals in the same period in 2020. Where its shares are traded. Profit before interest, taxes, zakat, depreciation, and amortization amounted to 897.8 million riyals, up 1.1 percent year-on-year.
First-quarter revenue rose 1.46 percent from the same period last year to 3.64 billion riyals, driven by the dairy business.
In Saudi Arabia and the wider Gulf Cooperation Council states, Almarai’s revenue fell 1.6 percent and 8.9 percent, respectively, but an increase of 47 percent for other markets offset the drop in sales elsewhere. In the dairy sector, net profit jumped 6.5% on the back of higher sales to “Egypt, Jordan and [other] export markets”.
Despite this, the high feed cost and low support for the sector continued to “negatively impact profitability, although partially nullified by strong cost control over payroll and operating expenses,” the company said in the stock exchange file.
The quarterly net income of the bakery business decreased by 35.7 percent, affected by lower sales volumes and school closures. Net income from the poultry trade decreased by 24.3 percent.
“In a benign business environment for the first quarter in the GCC, Almarai operations continued to demonstrate flexibility in managing profitability. The company said structural cost pressures driven by subsidy cuts and higher feed costs were managed through strong cost controls.
“Almarai expects that the current trading conditions will continue in the short term [and that they] … will continue to navigate the current market conditions with different scenario planning options.”
Almarai’s selling and distribution expenses for the first quarter decreased by 7.5 million riyals, or 1.2 percent, year on year, as a result of improved cost management. General and administrative expenses decreased by 2.5 percent. However, other expenses increased by 30.7 million riyals, mainly due to the primary effect from last year when one-off gains of 30 million riyals were realized from the sale of arable assets.
The value of financial assets decreased by 28.4 million riyals, as “the credit position remained stable and did not require a similar additional provision for the past year.” She added that the company’s financing costs also decreased by 36.1 million riyals as a result of lower interest rates and a reduction in the ongoing debt.
Almarai spent 299.1 million riyals on investment activities, down 45 million riyals on an annual basis, after an adjustment to recover 585 million dirhams as a term deposit in the first quarter of last year. Cash used in investing activities represents 8.2 percent of the company’s revenue.
In March, Almarai agreed to buy Backmart’s business in the UAE and Bahrain for $ 25.47 million, as it looks to expand its product range across the region.
The company said in a statement at the time that the acquisition of 100 percent of the company “will enhance Almarai’s ability to increase its contribution to the Kingdom’s food security, in line with the Kingdom’s Vision 2030 program.”
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Source: Ukrgate
