Saudi Arabia's Almarai ups stake in poultry firm Pure Breed
Food company says deal will allow it to 'further strengthen the poultry industry' in the kingdom
Saudi Arabia's Almarai has completed a deal to increase its stake in Pure Breed Poultry.
Almarai, which is the biggest dairy company in the kingdom, purchased a further 37.6 per cent stake in the poultry company from existing shareholders for 52.9 million Saudi riyals (Dh51.8m). It now controls 93.5 per cent of Pure Breed's share capital.
"The increase in shareholding will add to Almarai's ongoing efforts to further strengthen the poultry industry in Saudi Arabia and GCC, and secure its supply of poultry parent stock," the company said in a statement to the Saudi stock exchange Tadawul, where its shares are traded.
Almarai said the deal would be financed through its cash flow and the financial impact of the purchase will be reflected within the current quarter's results.
Pure Breed is the biggest producer of chicken breast meat in Saudi Arabia, according to its website, with a production capacity of 5,000 kilograms per year. It has been in business since 1991 and employs 300 staff.
Last month, Almarai recorded a 3.1 per cent increase in revenue for the first six months of the year of 7.07 billion riyals, although net profit dipped 8.7 per cent to 919m riyals. The company attributed lower profit to a number of factors including higher feed costs, higher labour costs and higher marketing spend, particularly in its bakery division.
Sales from its poultry division climbed 20 per cent to more than 1bn riyals and profit jumped 36.2 per cent to 125m riyals.
Poultry is now the company's third-biggest source of revenue, responsible for 15 per cent of its first half sales, behind fresh dairy (38 per cent of sales) and cheese, butter and cream (16 per cent).
Updated: August 6, 2019 01:21 PM