Saudi Arabia’s Almarai, the largest dairy company in the Middle East, declared a more than 4% surge in fourth-quarter net profit, driven by increased revenue from its poultry and dairy sectors.
The net profit attributable to shareholders, after zakat and tax for the three months ending December 31, climbed to SR 370.72M ($98.85M), as disclosed in a filing to the Saudi stock exchange Tadawul on Sunday.
Operational Efficiency Drives Almarai’s 5% Operating Profit Increase
The rise in net profit was primarily attributed to a 5% increase in operating profit, resulting from revenue growth, stabilized commodity costs, and efficient management of operating expenses.
Despite higher funding costs, the net profit for Q4 2023 increased by 4%, mainly due to elevated operating profit and synergies resulting from the 100% acquisition of the Egypt and Jordan business earlier in the year.
In terms of business segments, Almarai’s dairy and juice business saw improved earnings in Q4, driven by enhanced sales in key Gulf markets and rigorous cost controls.
The bakery segment also experienced annual net profit growth, attributed to increased sales of bread and single-serve products. Additionally, higher production capacity contributed to a boosted net profit in the poultry business.
For the entire year of 2023, Almarai’s net profit rose by more than 16% annually to 2.05 billion riyals, while revenue increased by approximately 5% to SR 19.58B. The company credited its profit growth to a stable market environment, strong trading performance, cost control, and stable commodity costs.
The revenue surge was facilitated by the expansion of the poultry business, the introduction of new products, and enhanced direct marketing communication with consumers, according to The National News.
Almarai, with plans to enter the seafood and frozen bakery sector, anticipates continued market share growth in its core business. The company also aims to explore additional inorganic growth opportunities and deploy capital in line with its five-year investment strategy.
