Almarai profits rise to SR355.8 million in the fourth quarter by 24%

Almarai Company revealed an increase in net profit after zakat and tax in the fourth quarter to SR355.8 million, compared to SR286.5 million in the same quarter of last year (12 months).
The operational profit amounted to SR504 million in the fourth quarter, compared to SR392.2 million in the same quarter of the previous year, an increase of 28.5%.
The net profit after zakat and tax during the 12-month period amounted to SR1.7 billion, compared to SR1.5 billion in the same period last year, with a growth of 12.5%.
The total shareholders’ equity (after deducting minority equity) amounted to SR16.6 billion in the current period, compared to SR16.1 billion in the same period last year, an increase of 3.4%.
Earnings per share in the current period reached SR1.79, compared to SR1.59 in the same period last year.
The increase of 24.2% in the Consolidated Profit Attributable to Shareholders of the Company as compared to the corresponding quarter of the last year is due to:
• Revenue (+13.7%): Positive trend from first 3 quarters have continued in the 4th quarter, driven mainly by Poultry and Bakery. Volume growth rates have continued in the current quarter driven by food service expansion and school normalization activities.
• Gross Profit (+11.8%): Global commodity cost inflation, driven mainly by farming feed raw materials (mainly corn and Alfalfa) and dairy foods (mainly butter related products) reduced the gross profit % growth relative to Revenue growth.
• Operating Profit (+28.5%): Better cost control, mainly for sales and marketing as well as for General & Administration expenses helped deliver a stronger growth in operating profit.
• Net Profit (+24.2%) Net profit growth was lower than operating profit growth due to higher funding cost in line with increase in SAIBOR interest rates.
Contribution of various Business Categories towards the increase in the Consolidated Profit Attributable to Shareholders of 24.2% is as follows:
• Dairy & Juice Category: The category profit increased by 0.6% as higher year on year sales growth of 5.8% was offset with cost inflation, mainly in dairy and feed commodities.
• Bakery Category: Net profit for the quarter grew by 10.0% mainly driven by revenue growth of 29.3% as higher single serve product sales continued to positively impact the revenue mix.
• Poultry Category: Volume growth remained positive due to additional capacity available in second half of year 2022. With 10.0% volume growth in the quarter, revenue grew by 31.2% but net profit grew by 13.8% due to commodity cost inflation.
• Other Category: The category reported a profit of SAR 9.4 M driven by overseas farming robust performance compared to a loss of SAR 44.1M in the same period last year.
The decrease of 23.2% in the Consolidated Profit Attributable to Shareholders of the Company for the fourth quarter 2022 (SAR 355.8 million) as compared to the previous quarter (SAR 463.2million) was due to seasonal adjustment in consumption patterns.
The increase of 12.6% in Consolidated Profit Attributable to Shareholders of the Company in the current year as compared to last year was due to:
• Revenue (+18.1%): Full year growth of 18.1% was mainly driven by Bakery (driven by school opening and single serve), Poultry (capacity expansion) and Long Life Dairy.
• Gross Profit (+11.2%): Global commodity cost inflation, driven mainly by farming feed raw materials (mainly corn and Alfalfa) and dairy foods (mainly butter related products) reduced the gross profit % growth relative to Revenue growth.
• Operating Profit (+13.0%): Better cost control, mainly for sales and marketing as well as for General & Administration expenses helped deliver positive operating profit growth.
• Net Profit (+12.6%): Net profit growth was in line with operating profit growth as higher funding cost, driven by increase SAIBOR interest rates, were offset by a one off gain from Zakat & tax adjustment amounted to SAR 32.0 M.
Contribution of various Business Categories towards the increase in the Consolidated Profit Attributable to Shareholders of 12.6% is as follows:
• Dairy & Juice Category: The category profit grew by SAR 31.2M as higher sales (+12.2% yoy) driven by improvement in long life dairy were offset with higher feed costs, more expensive dairy commodities and higher transportation expenses.
• Bakery Category: Bakery profit grew by SAR 116.1 M 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.
• Poultry Category: Volume growth remained positive due to additional capacity available in second half of year 2022, resulting in 10.0% additional bird capacity. The higher capacity assisted poultry to report net income profitability at 9.9% of revenue, compared to 9.3% last year.
• Other Category: Net profit for the category was a loss of SAR 119.9 M, compared to a loss of 84.4 M last year due to a one off investment write off. The underlying overseas farming operations improved performance year on year due to improved crop production.