Saudi Arabia's Almarai, the Middle East's largest dairy company, has reported a more than 13 per cent rise in third-quarter net profit on the back of higher revenue, as the Arab world’s largest economy continues to recover from the Covid-19-induced slowdown.
Consolidated profit attributable to shareholders for the three-month period ending September 30 climbed to 463.1 million Saudi riyals ($123.49m), compared with 409m riyals during the same period last year, the company said in a statement on Sunday to the Saudi stock exchange Tadawul, where its shares are traded.
Revenue during the period rose about 21 per cent to 4.76 billion riyals, mainly driven by higher sales in its poultry and bakery divisions.
“Positive revenue growth was evident in all categories due to improved trading conditions post Covid-19 movement restrictions, opening of educational institutions and higher number of visitors in the region,” the company said.
Saudi Arabia’s economy continues to recover from the pandemic as a result of the easing of Covid-19 restrictions and higher oil prices.
The kingdom's seasonally adjusted S&P Global purchasing managers’ index recorded a reading of 56.6 in September, indicating a growth in the country’s non-oil private sector economy.
Output and new orders during the month rose sharply on robust demand, despite inflation concerns and global macroeconomic headwinds, the PMI results show.
The kingdom's economy is set to grow at the quickest pace in a decade and could be one of the world’s fastest-growing economies this year, the International Monetary Fund said in August.
The IMFestimates that the kingdom’s economy will grow 7.6 per cent in 2022 and 3.7 per cent in 2023 after expanding 3.2 per cent last year.
The World Bank estimates that the country's economy will grow 7 per cent this year while Jadwa Investment expects it to expand 7.7 per cent in 2022, driven by the oil price rally.
Sales in all categories, including dairy and juice, bakery and poultry, rose during the period, boosting the profit of Almarai. Bakery sales rose about 32 per cent, while sales in poultry increased 43.2 per cent, the company said.
Dairy and juice sales jumped 15.4 per cent but were “partly offset by cost inflation mainly in dairy and feed commodities", it said.
Almarai’s nine-month profit rose about 10 per cent to 1.4bn riyals, compared with 1.2bn riyals recorded by the company during the same period last year. Revenue rose nearly 20 per cent to 13.8bn riyals.
“We expect the positive momentum to continue, albeit at a lower rate in the future,” the company said.
“The key risk remains surging cost inflation for dairy and feed commodities. We continue to see parts of the global supply chain remaining under stress. Almarai will continue to manage this risk by better hedging activities and by leveraging its stock cover, where relevant.”