SAUDI ARABIA – Saudi Arabia’s Almarai, the Middle East’s largest dairy company, has announced a robust increase of more than 4% in its net profit for the fourth quarter of 2023, reaching 370.72 million Saudi riyals (US$98.85 million).
According to the company, the surge was primarily driven by higher revenue, notably in the poultry and dairy segments.
The company, listed on the Saudi stock exchange Tadawul, revealed that the net profit boost was supported by a 5% rise in operating profit.
This was attributed to sustained revenue growth, stabilized commodity costs, and effective management of operating expenses.
Almarai highlighted the positive impact of its 100% acquisition of the Egypt and Jordan business in the previous year.
Despite higher funding costs, synergies from the acquisition contributed to the overall profit increase.
In the fourth quarter, Almarai’s revenue grew by approximately 2%, totaling 4.92 billion riyals annually. The company performed well in its core GCC markets, with Saudi Arabia leading the positive trend.
However, challenges such as lower commodity sales in North America and reduced contributions from Egypt due to currency devaluation affected overall revenue growth.
The dairy and juice business witnessed an increase in earnings, driven by improved sales in crucial Gulf markets and stringent cost controls.
The bakery segment also reported higher net profit, attributed to increased sales of bread and single-serve products. Additionally, expanded production capacity led to a surge in net profit in the poultry business.
For the entire fiscal year 2023, Almarai’s net profit marked an impressive annual increase of over 16%, reaching 2.05 billion riyals.
The corresponding revenue for the same period grew by around 5%, totaling 19.58 billion riyals. Almarai credited a stable market environment, strong trading performance, and strategic initiatives for its sustained growth.
Looking ahead, the company expressed confidence in its core business continuing to gain market share in selected product categories and geographies.
Almarai also disclosed plans to enter the seafood and frozen bakery business while exploring additional opportunities for inorganic growth in line with its five-year investment strategy.
In other related development, Akshayakalpa Organic, a prominent player in the Indian organic dairy industry, has inaugurated a new production facility near Chennai, Tamil Nadu, equipped with modern technology and an impressive capacity of processing 40,000 liters of high-quality organic dairy products daily.
The company, which has achieved substantial market presence and revenue growth, is committed to ethical and sustainable farming practices.
Subscribe to our food and agriculture industry email newsletters that provide busy executives like you with the latest news insights and trends from Africa and the World. SUBSCRIBE HERE
