The consolidated annual financial results of Almarai Company showed an increase in its net profit after zakat and tax by 24.18% in the fourth quarter of 2022, to about 355.8 million riyals, compared to about 286.5 million riyals in the same quarter of 2021.
On a quarterly basis, Almarai’s net profit decreased by 23.18% compared to a net profit of about 463.17 million riyals in the third quarter of 2022.
The company said in a statement on “Tadawul Saudi Arabia”, today, Sunday, that the increase in profits in the fourth quarter of 2022, on an annual basis, is due to several factors, including an increase in revenues by 13.7% to about 4.839 billion riyals, due to the continued positive growth for the year in the fourth quarter. Driven by growth in the poultry and bakery sectors. Growth rates also continued due to the expansion of food services and back to school.
It is also due to the increase in gross profit by 11.8% to about 1.33 billion riyals, given that global commodity cost inflation, mainly driven by raw materials for agricultural fodder, especially corn, alfalfa, and mainly butter-related dairy products, led to lower gross profit growth compared to revenue growth.
Good cost control, mainly for sales and marketing as well as general administrative expenses, contributed to stronger growth in operating profit.
Almarai indicated that the growth in net profits was lower than the growth in operating profits due to the high financing cost in line with the increase in SIBOR interest rates.
Almarai’s net profit increased by 12.55% in 2022, to about 1.76 billion riyals after zakat and tax, compared to about 1.56 billion riyals in 2021.
Almarai Company said that the performance was strong in 2022 and positive growth in revenues was observed in all product categories and in all geographical regions.
And I expected this positive momentum to continue, albeit at a lower rate in the future, with the entry into normal commercial patterns after the full opening of educational institutions and the resumption of tourism activities.
“The main concerns remain rising cost inflation for dairy and feed commodities. We continue to see parts of the global supply chain remain under pressure, although some regions are now showing signs of price stabilization,” she added.
Almarai stated that it will continue to manage these risks through better hedging activities and optimizing stock utilization.