Monday, 4 July 2022

SADAFCO Profits Fell to SR209 mln during End of March 2022, by 20%

The net profit after zakat and tax for the Saudia Dairy and Foodstuff Company “SADAFCO” decreased to SR209 million during the year ending in March 2022, compared to SR261 million during the year before last, at a rate of 20%.

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This came after Saudia Dairy and Foodstuff announcement on Tuesday of the annual financial results ending in 31.03.2022 (12 months).

The operational profit during the current period amounted to SR237 million, compared to SR285 million during the same period of the year before, a decrease of 17%.

As for the gross profit during the current period, it amounted to SR2.17 billion, compared to SR2.10 billion during the same period of the year before, an increase of 3%.

Profits per share during the current period amounted to SR6.48, compared to SR8.14 during the same period last year.

The reason of the increase (decrease) in the net profit during the current year compared to the last year is:

Performance of SADAFCO has been improving quarter upon quarter with Q4 posting the strongest results of the year. The good Q4 results were driven by strong sales, price increases and efficiency gains.

A satisfactory net margin of 9.6% of SR 209 Mln (vs 12.4%; SR 261 Mln Last year) has been achieved despite negative impact of significant cost drivers, mainly: higher costs of our key raw materials; increased local and international logistics costs; reduced purchasing power of consumers due to full year impact of 15% VAT (vs 9 months in last year).

Sales of SR 2,170 Mln vs (last year’s SR 2,105 Mln) has increased 3% mainly due to expansion of frozen category; value sales of ice cream + 10%, cheese +7%, tomato paste +2%, and Mlekoma 3rd party sales.

A gross margin of 30% has been achieved even with above mentioned factors due to a better mix favoring Ice Cream.

Selling and distribution expenses as % of sales maintained at 14% (SR 311 mln vs SR 307 mln).

General and administration expenses maintained at 5% of sales (SR 113 vs. SR 109).

Impairment losses on financial assets (provision for trade receivables) is lower by SR 0.9 Mln (SR 1.2 Mln vs. SR 2.1 Mln last year) due to more effective collection process.

Other operating income representing profit on scrap sales is lower.

Finance income is lower due to decline in deposit rates offered by banks.

Zakat and income tax increase is mainly due to SR 2.6 Mln (Nil last year) income tax as Polish operations have delivered a profit.

SADAFCO has been able to deliver 9.6% in a challenging year through close focus on value generation activities on profitable categories while bringing efficiencies in our operations, logistics and distribution.

The year has witnessed tremendous increase in raw material and logistic costs across the world resulting in high end inflation in food prices throughout the globe. At the same time cost of doing business is also putting pressure on producers. The profit has been generated with keeping close focus on value generation activities on profitable categories while bringing efficiencies in our operations, logistics and distribution.

We are also witnessing longer school year and in-country (KSA) entertainment activities. All this bodes well for our portion/single packs which have a higher profit margin and gives more consumption opportunities to the consumers. We see improvement in our format mix due to this.

During the year Ice Cream factory has become fully operational churning out 22,000 Ice Cream sandwiches per hour enabling us to meet higher consumer demand in summer months.

Work on Makkah Depot project of SR 27 Mln has initiated and is expected to finish in this Financial Year.

The board approved a half year dividend of SR 3/share that was paid in January, in addition to final dividend announced in Extra ordinary general meeting of July 2021. This makes the total dividend payment of SR 192 Mln during the year vs SR 176 Mln last year.

We continue to generate healthy cash flow from operations and now the major projects of the company have finished reducing the need for investing activities. This leads to a robust cash position of SR 626 Mln.

Shareholders’ equity up at a healthy 1.540 Bln vs 1.533 Bln at 31 Mar 2021.

The profits per share are computed as follows:

Profit attributable to owners of SADAFCO SR 207,291,000

Total shares 32,500,000

Treasury shares held by the Company 500,250.

Total shares outstanding 31,999,750

EPS 6.48

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