Saudi Arabia's Almarai, the Middle East's largest dairy company, has reported a 24 per cent rise in fourth-quarter net profit, boosted by higher sales in its poultry and bakery businesses.
Consolidated profit attributable to shareholders for the three-month period ending December 31 climbed to 355.8 million Saudi riyals ($94.8 million), compared with 286.5 million 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 nearly 14 per cent to 4.84 billion riyals.
“Positive trend from the first three quarters have continued in the fourth quarter, driven mainly by poultry and bakery [businesses]. Volume growth rates have continued in the current quarter driven by food service expansion and school normalisation activities,” Almarai said in the statement.
Sales in all categories, including dairy and juice, bakery and poultry, rose during the period. Revenues from the bakery section rose about 29 per cent, while those from poultry increased more than 31 per cent, the company said.
Dairy and juice sales jumped 5.8 per cent, but income from the business was offset by “cost inflation, mainly in dairy and feed commodities".
Almarai’s full-year profit rose more than 12 per cent to 1.76 billion riyals in 2022. Revenue rose about 18 per cent to 18.7 billion riyals.
“We expect this positive momentum to continue, albeit at a lower rate in the future as we enter a normalised consumption pattern after full opening of education institutions and resumption of tourism activities,” the company said.
“The key risk remains surging cost inflation for dairy and feed commodities. We continue to see parts of global supply chain remaining under stress although some areas are now showing signs of stability.”
Consumer prices in Saudi Arabia edged up to 3.3 per cent year-on-year in December, with higher housing costs driving up inflation, according to the latest government data.
The Consumer Price Index in December was up from 2.9 per cent in November, Saudi Arabia’s General Authority for Statistics (Gastat) said in the latest CPI data released last week.
Prices in December were up by 0.3 per cent on the month, the report showed.
Inflation globally has risen sharply due to steep increases in the prices of food and other commodities since the Ukraine conflict began in February last year.
However, inflation in the GCC has been significantly lower than in most advanced and emerging market countries amid improved economic activity, driven by higher oil and gas prices.
Saudi Arabia's preliminary estimates for 2023 indicate real gross domestic product growth of 3.1 per cent, with inflation projected at 2.1 per cent, Saudi Finance Minister Mohammed Al Jadaan said in December.
The Arab world's largest economy is forecast to have grown 8.5 per cent in 2022 and the kingdom's inflation rate last year was about 2.6 per cent, he said.