Saudi Arabia’s Almarai, the Middle East’s largest dairy company, reported a 5 per cent increase in third-quarter net profit, boosted by revenue growth in core markets, cost controls in operations and stable commodity costs.
Net profit attributable to shareholders, after zakat and tax, for the three-month period ending September 30, rose to 486.26 million Saudi riyals ($129.67 million) from the same period last year, the company said in a bourse filing on Sunday to the Saudi stock exchange Tadawul, where its shares are traded.
Revenue rose by 0.6 per cent to 4.79 billion riyals from the same period a year earlier, mainly driven by higher sales in its bakery and poultry divisions.
“This robust operational performance allowed the group to offset higher funding costs caused by the increase in the Saibor interest rate and a one-off benefit for zakat provision in 2022,” Almarai said.
“A strong performance in core GCC markets resulted in year-on-year revenue growth of 4 per cent. This was led primarily by an expansion in the capacity of the poultry category, followed by growth of the dairy and bakery category, thanks in part to another successful back-to-school season.
“However, the devaluation of the Egyptian pound and a marked reduction in demand of external alfalfa sales [mainly to East Asian countries] reduced the group’s quarterly revenue by 3 per cent, with no material impact on profitability.”
Almarai’s dairy and juice business posted a decline in earnings because of the devaluation of the Egyptian pound, higher investments in marketing activities and delayed phasing of commodity cost inflation, mainly alfalfa, corn and soya, the company said.
However, net profit from the bakery and poultry segments grew on higher sales driven by the back-to-school season, leveraging of fixed costs, and additional capacity, it added.
Almarai's net profit in the first nine months of 2023 rose 19.5 per cent to 1.67 billion riyals from the same period a year earlier.
Revenue in the first nine months increased by 5.6 per cent to 14.7 billion riyals.
“On a year-to-date basis, top line growth has been driven by capacity expansion and market share gains across multiple categories,” the company said.
“In addition to revenue growth, tight controls on overheads were applied, despite having higher funding costs due to the higher Saibor rate.”
Net profit growth was also supported by the full consolidation of the group’s Egypt and Jordan operations earlier in the year.
A unit of Saudi Arabia's Almarai completed the acquisition of International Dairy and Juice Limited, its former joint venture with PepsiCo in Egypt and Jordan, in February.
Almarai Investment Holding bought PepsiCo’s 48 per cent share in IDJ, increasing Almarai’s stake in the company to 100 per cent from 52 per cent, in a deal worth 255 million Saudi riyals.
IDJ specialises in food and beverage manufacturing and distribution in Egypt and Jordan. The company also exports its products to other markets.
The Mena region’s food and beverage companies are increasingly evaluating acquisitions to drive growth, diversify their product range and increase their presence to better deal with challenges that arose from the coronavirus pandemic.
Almarai’s results come as Saudi Arabia’s economy continues to post strong growth, boosted by the non-oil sector. The country's economy grew by 1.2 per cent in the second quarter of this year, a slightly faster pace of growth than the initial estimates, driven by an expansion in the non-oil sector.
Business activity in Saudi Arabia’s non-oil private sector economy remained robust in September as a sharp increase in output and the number of new orders drove business activity.
The headline Riyad Bank purchasing managers’ index reading climbed to 57.2 in September, up from 56.6 in August, rising further above the neutral 50-point mark that separates growth from contraction.
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It's up to you to go green
Nils El Accad, chief executive and owner of Organic Foods and Café, says going green is about “lifestyle and attitude” rather than a “money change”; people need to plan ahead to fill water bottles in advance and take their own bags to the supermarket, he says.
“People always want someone else to do the work; it doesn’t work like that,” he adds. “The first step: you have to consciously make that decision and change.”
When he gets a takeaway, says Mr El Accad, he takes his own glass jars instead of accepting disposable aluminium containers, paper napkins and plastic tubs, cutlery and bags from restaurants.
He also plants his own crops and herbs at home and at the Sheikh Zayed store, from basil and rosemary to beans, squashes and papayas. “If you’re going to water anything, better it be tomatoes and cucumbers, something edible, than grass,” he says.
“All this throwaway plastic - cups, bottles, forks - has to go first,” says Mr El Accad, who has banned all disposable straws, whether plastic or even paper, from the café chain.
One of the latest changes he has implemented at his stores is to offer refills of liquid laundry detergent, to save plastic. The two brands Organic Foods stocks, Organic Larder and Sonnett, are both “triple-certified - you could eat the product”.
The Organic Larder detergent will soon be delivered in 200-litre metal oil drums before being decanted into 20-litre containers in-store.
Customers can refill their bottles at least 30 times before they start to degrade, he says. Organic Larder costs Dh35.75 for one litre and Dh62 for 2.75 litres and refills will cost 15 to 20 per cent less, Mr El Accad says.
But while there are savings to be had, going green tends to come with upfront costs and extra work and planning. Are we ready to refill bottles rather than throw them away? “You have to change,” says Mr El Accad. “I can only make it available.”
Five hymns the crowds can join in
Papal Mass will begin at 10.30am at the Zayed Sports City Stadium on Tuesday
Some 17 hymns will be sung by a 120-strong UAE choir
Five hymns will be rehearsed with crowds on Tuesday morning before the Pope arrives at stadium
‘Christ be our Light’ as the entrance song
‘All that I am’ for the offertory or during the symbolic offering of gifts at the altar
‘Make me a Channel of your Peace’ and ‘Soul of my Saviour’ for the communion
‘Tell out my Soul’ as the final hymn after the blessings from the Pope
The choir will also sing the hymn ‘Legions of Heaven’ in Arabic as ‘Assakiroo Sama’
There are 15 Arabic speakers from Syria, Lebanon and Jordan in the choir that comprises residents from the Philippines, India, France, Italy, America, Netherlands, Armenia and Indonesia
The choir will be accompanied by a brass ensemble and an organ
They will practice for the first time at the stadium on the eve of the public mass on Monday evening
Abu Dhabi Grand Slam Jiu-Jitsu World Tour Calendar 2018/19
July 29: OTA Gymnasium in Tokyo, Japan
Sep 22-23: LA Convention Centre in Los Angeles, US
Nov 16-18: Carioca Arena Centre in Rio de Janeiro, Brazil
Feb 7-9: Mubadala Arena in Abu Dhabi, UAE
Mar 9-10: Copper Box Arena in London, UK
Grand Slam Los Angeles results
Men:
56kg – Jorge Nakamura
62kg – Joao Gabriel de Sousa
69kg – Gianni Grippo
77kg – Caio Soares
85kg – Manuel Ribamar
94kg – Gustavo Batista
110kg – Erberth Santos
Women:
49kg – Mayssa Bastos
55kg – Nathalie Ribeiro
62kg – Gabrielle McComb
70kg – Thamara Silva
90kg – Gabrieli Pessanha
