Saudi dairy Almarai’s net profit increases to $453m in 22

Saudi dairy giant, Almarai, recorded a 12.5 percent increase in net profit to SR1.7 billion ($453 million) in 2022, compared to SR1.5 billion recorded the previous year, driven by bakery and dairy segments.

The Tadawul-listed firm saw its revenue rise by 18 percent to hit SR18.7 billion in 2022 from SR15.8 billion in 2021. The company’s revenue increase was mainly driven by its bakery segment, which was boosted by school opening and single serve, as well as its expansion in poultry and long-life dairy products.

The profit of Almarai’s bakery category increased by SR116.1 million as strong top-line growth, driven by back-to-school and improved single-serve sales, resulted in better utilization of existing facilities, driving higher profits for the category via leveraging economies of scale.

The company’s poultry volume growth remained buoyant due to additional capacity available in the year’s second half, which resulted in 10 percent additional bird capacity. The increase in capacity led to reported net income profitability at 9.9 percent of revenue, compared to 9.3 percent the year before.

Almarai added that its improvements in long-life dairy were offset by higher feed costs, more expensive dairy commodities, and higher transportation expenses, as the category reported an annual profit increase of SR 31.2 million.

Other categories reported a profit of SR 9.4 million driven by overseas farming’s robust performance, compared to a loss of SR44.1 million in the same period last year.

The company said that its net profit growth was in line with operating profit growth, as higher funding costs, driven by an increase in the Saudi Arabian Interbank Offered Rate, were offset by a one-off gain from Zakat and tax adjustment amounting to SR32 million.

Meanwhile, the company’s total shareholders’ equity in 2022 increased by 3.4 percent compared to the year before, reaching SR16.6 billion with a profit per share at SR1.79.

Almarai recorded a decrease of 23 percent in net profit in the fourth quarter of 2022, compared to the third quarter of 2022, but witnessed an increase in quarterly revenue by 1.47 percent.

Founded in 1977, Almarai is a Saudi multinational dairy company specializing in food and beverage manufacturing and distribution, with its main offices in Riyadh, Saudi Arabia.