Saudi Arabia’s Almarai Q3 profit rises 13 per cent

Arabian Gulf's largest dairy company beats analysts' forecasts as sales rose.

The three months between July to September have been Almarai’s most profitable quarter for the past three years. Satish Kumar / The National

The regional food vendor Almarai reported a double-digit rise in its profits for the third quarter, buoyed by sales during Ramadan.

The Saudi company, the largest dairy provider in the GCC, said yesterday that its profits for the three months to September grew to 539.4 million Saudi riyals (Dh527.99m), a 13.4 per cent increase on last year, and a 24.5 per cent jump on the second quarter of this year.

The increase in profitability, which was broadly in line with analyst forecasts, was prompted by sales of 3.27 billion riyals for the quarter, a year-on-year rise of 11.7 per cent. The company reported an increase in profitability across all core business segments, with the exception of its poultry division.

The three months between July to September have been Almarai’s most profitable quarter for the past three years.

“There are a number of seasonal factors that boost profitability for the quarter,” said Samir Murad, a vice president at the investment bank NBK Capital in Dubai.

“Ramadan of course has a massive impact, and you also get higher consumption of juice products over the summer.”

Sales in Saudi Arabia grew by 10.7 per cent year on year, with sales across its other markets up by 13.7 per cent.

Separately, Almarai said a fire had caused “significant” damage at one of its bakeries in Jeddah last week and that it would evaluate the financial impact of the blaze in coming weeks. No one was injured in the fire.

“We will be making every effort to minimise the impact of this incident and to keep bakery products available in the market,” the company said yesterday.

“The financial impact will be evaluated over the coming weeks after conducting the assessment.”

Almarai operates a total of six bakeries. Almarai’s shares fell by 5.64 per cent yesterday after trading on Saudi Arabia’s Tadawul resumed following a one-week break for Eid Al Adha.

“The price has been on an upwards trend for much of the year, so it’s unsurprising it’s seen a bit of a correction,” said Mr Murad.

The stock’s decline came as part of a mass sell-off of equities on the Tadawul, which was down 6.62 per cent yesterday, as concerns about the pace of growth in the world economy hit stock markets across the region.

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