Almarai Company Announces Its Condensed Consolidated Interim Financial Results for The Period Ended 30th June 2022 (Six Months)
| Element List | Current Quarter | Similar quarter for previous year | %Change | Previous Quarter | % Change |
|---|---|---|---|---|---|
| Sales/Revenue | 4,610,447 | 4,005,568 | 15.1 | 4,503,457 | 2.38 |
| Gross Profit (Loss) | 1,469,606 | 1,355,739 | 8.4 | 1,331,916 | 10.34 |
| Operational Profit (Loss) | 646,299 | 601,646 | 7.42 | 547,106 | 18.13 |
| Net Profit (Loss) after Zakat and Tax | 520,360 | 481,979 | 7.96 | 420,457 | 23.76 |
| Total Comprehensive Income | 495,732 | 458,573 | 8.1 | 365,911 | 35.48 |
| All figures are in (Millions) Saudi Arabia, Riyals | |||||
| Element List | Current Period | Similar period for previous year | %Change |
|---|---|---|---|
| Sales/Revenue | 9,113,904 | 7,650,582 | 19.13 |
| Gross Profit (Loss) | 2,801,522 | 2,590,844 | 8.13 |
| Operational Profit (Loss) | 1,193,405 | 1,103,998 | 8.1 |
| Net Profit (Loss) after Zakat and Tax | 940,817 | 867,925 | 8.4 |
| Total Comprehensive Income | 861,643 | 838,225 | 2.79 |
| Total Share Holders Equity (after Deducting Minority Equity) | 15,837,491 | 15,462,388 | 2.42 |
| Profit (Loss) per Share | 0.96 | 0.88 | |
| All figures are in (Millions) Saudi Arabia, Riyals | |||
| Element List | Explanation |
|---|---|
| The reason of the increase (decrease) in the net profit during the current quarter compared to the same quarter of the last year is | The increase of 8.0% in the Consolidated Profit Attributable to Shareholders of the Company as compared to the corresponding quarter of the last year is due to: |
• Revenues: The revenue growth of 15.1% was driven mainly by bakery, poultry and fresh dairy category. 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.
• Gross Profit: Increased by 8.4%, at a lower rate to revenue growth due to higher input costs driven by higher corn, soya and dairy commodities, mainly butter and alfalfa. In addition, higher global transportation charges further amplified the cost inflation.
• Selling and Distribution Expenses (S&D): Increased by SAR 31.5 million, 5.0% which is in line with volume growth rate due to higher sales activity.
• General and Administration Expenses (G&A): Increased by SAR 5.8 million, in line with back office function activities to support the sales growth.
• Other Expenses: Increased by SAR 13.8 million, mainly due to higher losses (mainly timing in nature) from sale of dairy herd.
• Impairment Reversal / (Loss) on Financial Assets: increased by SAR 18.2 million in line with general increase in trade debtors, mainly in Food services channel.
• Finance Cost: Funding costs are in line with last year as the benefit of a lower weighted average debt balance is off set with higher interest rate driven by higher SIBOR.
Contribution of various Business Categories towards the increase in the Consolidated Profit Attributable to Shareholders of 8.0 % is as follows:
• Dairy & Juice Category: The category Profit declined by 7.1% due to higher cost inflation, mainly in dairy and feed commodities, and adverse mix due to phasing of Ramadan.
• Bakery Category: The Category Profit Increased by 124.6% primarily due to higher sales, driven by single serve product mix due to opening of schools and leveraging economies of scale for bakery manufacturing.
• Poultry Category: The category Profit increased by 15.3% driven mainly by revenue growth of 30.1%. The top line growth was supported by volume growth in Food Service segment, however profitability growth was lower than revenue growth due to continual increase in cost of corn and soya.
• Other Category: The Category reported profit of SAR 2.6 million for the current quarter which is mainly of a timing nature due to crop cycle in USA and Argentina.
• Revenues: The revenues growth of 19.1% was driven mainly by bakery and poultry category. 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.
• Gross Profit: Increased by 8.1%, at a lower rate to revenue growth due to higher input costs driven by higher corn, soya and dairy commodities.
• Selling and Distribution Expenses (S&D): Increased by 6.0% which is in line with volume growth rate.
• General and Administration Expenses (G&A): Increased by 6.6%, in line with back office function activities to support the sales growth.
• Other Expenses: Increased by SAR 5.0 million, mainly due to slightly higher losses (mainly timing in nature) from sale of dairy herd.
• Impairment Reversal / (Loss) on Financial Assets: Increased by SAR 28.2 million in line with general increase in trade debtors.
• Finance Cost: Funding costs are in line with last year as the benefit of a lower weighted average debt balance is off set with higher interest rate driven by higher SIBOR.
Contribution of various Business Categories towards the increase in the Consolidated Profit Attributable to Shareholders of 8.4% is as follows:
• Dairy & Juice Category: The category Profit was virtually flat on a yoy basis due to stronger sales mix across the board, getting offset by higher cost inflation driven by feed and dairy commodities. In addition, EGP devaluation resulted in further additional charges however tighter cost controls across the board assisted in maintaining the bottom line at nearly the same level as last year.
• Bakery Category: The Category Profit Increased by 101.0% primarily due to higher sales, driven by single serve product mix due to opening of schools, product innovation and leveraging economies of scale for bakery manufacturing.
• Poultry Category: The category Profit increased by 12.5% driven mainly by revenue growth of 24.8%. The top line growth was supported by volume growth in Food Service segment, however profitability growth was lower than revenue growth due to continual increase in cost of corn and soya.
• Other Category: The Category reported a loss of SAR 12.7 million which is mainly of a timing nature due to crop cycle in USA and Argentina
• EBITDA: For Second quarter 2022 Earnings before Interest, Taxes and Zakat, Depreciation and Amortization (EBITDA) reached SAR 993.7 million, an increase of 6.9% as compared to the corresponding quarter of last year (SAR 929.9 million). For the six months period ended 30th June. 2022 Earnings Before Interest, Taxes and Zakat, Depreciation and Amortization (EBITDA) reached SAR 1,942.4 million, an increase of 6.3% as compared to the corresponding period of last year (SAR 1,827.7 million).
• Profit Margins: For Second quarter of 2022, The Gross Profit, Operating Profit and Consolidated Profit Attributable to Shareholders of the Company are representing 31.9%, 14.0%, and 11.3% of Revenue as compared to the corresponding quarter of last year of 33.8%, 15.0%, and 12.0%, respectively. For the six months period ended 30th June 2022, it represents 30.7%, 13.1%, and 10.3% of Revenue as compared to the corresponding period of last year of 33.9%, 14.4%, and 11.3%, respectively.
• A summary of the Statement of Cash Flows for the Six Months ended 30th June 2022 is as follows:
- The Cash Generated from Operating Activities (OCF) reached SAR 1,364.1 million, a decrease of 41.2%, as compared to last year (SAR 2,321.8 million). The OCF represents 15.0% of Revenue as compared to 30.3% for the last year.
- The Cash used in Investing Activities reached SAR 1,008.7 million as compared to the same period last year (SAR 721.3 million), an increase of 39.9 %. Investing Activities represent 11.1% of revenue as compared to 9.4% for the last year.
- The free cash flow (FCF) reached SAR 355.4 million as compared to the last year (SAR 1,600.5 million), a decrease of 77.8%. The FCF represent 3.9% of revenue as compared to 20.9% for the last year.
- FCF reduction is mainly driven by expansion of working capital mainly due to higher inventory valuation. The higher inventory valuation is driven by global cost inflation where the company has maintained stock cover in number of days but inventory valuation has risen in line with higher prices.
General Comments:
Improved Trading conditions has resulted in another strong quarterly performance for Q2 2022. We expect the positive momentum to continue, albeit at a lower rate in coming quarters as we will enter normalized trading patterns in 2nd half of the year, from a comparison perspective.
The key risk remains surging cost inflation for dairy and feed commodities, although the current trend is normalizing and even reversing for some commodities. Almarai will continue to manage this risk by better hedging activities and by leveraging its stock cover, where relevant.
The Condensed Consolidated Interim Financial Statements for the Six Months ended 30th June 2022 will be available through the following link on Almarai Website, and Almarai IR App.
https://www.almarai.com/en/corporate/investors/annual-report-financial-statement/
Conference call for analysts and investors will be on 19th July 2022 at 4:00 p.m. KSA time.
The presentation accompanying the conference call will be available on Almarai website within the Investors section under Earning Presentations at:
https://www.almarai.com/en/corporate/investors/earning-presentations/
The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.