Saudi Arabia’s Almarai reports 17% jump in Q3 profit on revenue boost

Tadawul-listed company's net income for the three-month period reached $152 million

Almarai's third-quarter revenue climbed 8.5 per cent on an annual basis to 5.2 billion riyals. Sammy Dallal / The National

Saudi Arabia’s Almarai, the Middle East’s largest dairy company, reported a 17 per cent annual rise in its third-quarter net income, as revenue grew on the back of higher sales of food and dairy products. Net profit for the three months to the end of September climbed to 570.5 million Saudi riyals ($152 million), the company said in a bourse filing on Sunday to the Saudi stock exchange Tadawul, where its shares are traded.

Revenue during the three-month period grew by 8.5 per cent year on year to 5.2 billion riyals, as measures to curb costs and stabilised commodity costs helped boost the company’s earnings. The company’s net income from its dairy and juice categories during the third quarter also rose, helped by “improved sales in core GCC markets” as well as tight cost management.

Income also surged in the bakery division on the back of production efficiencies and “seasonal adjustments” in consumption patterns, the company said. The quarterly earning bodes well for Almarai's plans to invest more than 18 billion riyals until 2028 to boost its existing businesses and add new segments.

The company's plan includes 7 billion riyals of investment into its poultry business and the injection of 5 billion riyals to further expand food business including its dairy, juice and bakery product lines. The company is also looking at expanding into “promising” operating sectors such as frozen food products, red meat, seafood and ice cream, the company said in March.

Almarai, like its peers across the Gulf countries, are investing to expand their businesses to boost their market shares. especially in Saudi Arabia and the UAE. The region’s two largest economies have maintained robust growth momentum since the pandemic-driven slowdown.

The UAE Central Bank expects the country's economy to expand by 4 per cent this year, higher than its June estimate of 3.9 per cent, on the back of a boost from its non-oil sector as the Emirates moves forward with its diversification strategy. Saudi Arabia’s economy is projected to grow by 1.7 per cent this year and 4.7 per cent in 2025 before averaging at 3.7 per cent in the following years, the International International Monetary Fund said earlier this year.

The GCC dairy market is projected to grow at an annual rate of 5.4 per cent until 2028, reaching a value of $13.59 billion, compared with $9.93 billion in 2022, according to Research and Markets. Almarai expects the “positive momentum to continue at the top line, driven by stable macroeconomic momentum and improved business performance,” it said on Sunday.