SADAFCO profits decline to SR54.6 million during the 3Q, down by 15%

Saudia Dairy and Foodstuff Co SADAFCO net profit after zakat and tax decreased to SR54.6 million during the third quarter, compared to SR64 million during the same quarter of the previous year by 15%.

This came after SADAFCO announced its Interim Financial Results for the Period Ending on 2021-12-31 (Nine Months ).

Gross profit amounted to SR160 million during the third quarter, compared to SR161 million during the same quarter of the previous year, down 0.4%.

The operational profit amounted to SR62 million during the third quarter, compared to SR68 million during the same quarter of the previous year, a decrease of 9%.

The net profit after zakat and tax during the current period amounted to SR146 million, compared to 205 million during the same period of the previous year, a decrease of 29%.

Profits per share during the current period amounted to 4.56 riyals, compared to 6.39 riyals during the same period of the previous year.

The company said that “The key highlight for the quarter is a continuation of reporting double digit net profit of 10.5%, despite the challenges of higher raw material, international logistic costs and selling & distribution costs. We commented on higher raw material and logistic cost in last quarters commentary, we foresee to hold this trend in at least 1H2022 calendar.”

Omicron notwithstanding, we are covered for Key Raw materials as a strategic action related to prior disruptions of international logistics. In addition, we have effected market based price increases for our significant SKUs.

During the quarter sales of SAR 520 Mln grew at a healthy 8% vs 482 Mln as a result of focused direct distribution in key categories. Gross margin of 30.8 % continues to be robust despite the inflationary pressures.

General and administrative (G&A) expenses are the same level of last year as a result of expense control initiatives.

Top line is in line with previous quarter. Gross margin is in line too with 30.8% vs. 30.5% previous quarter. Net profit in this quarter is SAR 1Mln higher than the previous quarter due to lower spending in S&D expenses due to lower A&P spending.

Net profit in the period is SAR 146Mln vs. SAR 205 Mln same period last year. This is a result of lower sales value driven by favorable Covid related tailwinds last year (especially in Q1), and VAT increase since Q2 (increased from the then 5% to 15%) last year, higher raw materials and logistic costs also adversely effected the results. However, we continue to keep a tight control on expenses and investing in sale generating activities through additional coverage, routes, numeric distribution thus increasing our sales growth trajectory vs last year.

New Ice Cream Factory has started trial production and is on track for commercial production soon. The factory is fully geared to cater to higher production and storage demands.

The Board has approved an interim dividend of SAR 3/ share for distribution in January 2022.

We continue to generate healthy cashflow leading to a strong cash position of SAR 679 Mln contributing to a robust financial position.

Shareholders’ equity up at a healthy 1.583Bln vs 1.581Bln at 31 Dec 2021.

The earnings per share is computed as follows:

Profit attributable to owners of SADAFCO SAR 145,856,000

Total shares 32,500,000

Treasury shares held by the Company 500,250.

Total shares outstanding 31,999,750

EPS 4.56