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Almarai headquarters
Almarai Co. faced significant challenges in the first nine months of 2021, but trading conditions have continued to remain normal during the year.
However, the base year effect of COVID-19 resulted in a “benign growth” in the top line for the year, the Saudi dairy producer said in a statement.
Almarai reported topline growth of 2% due to the strong performance in Egypt, Jordan and export markets across all product categories. The normalization effect of COVID-19 resulted in lower sales in the GCC countries relative to the year 2020.
Despite these challenges in trading markets, the company continued to exercise cost control on its entire supply chain to deliver customer value.
Most of these costs were structural in nature, including the subsidy removal and a 100% surge in the cost of the imported alfalfa. In addition, higher prices in commodity markets, especially corn and soya, are now impacting current cost run rates. These cost increases are partially offset by savings in funding costs and cost-saving initiatives.
Almarai is developing multiple scenarios to manage this impact and will roll out additional plans during the next few quarters to ensure the supply of quality products to its customers, while maintaining a healthy return for shareholders.
The company reported a net profit after Zakat and tax of SAR 1.277 billion for the first nine months of 2021, a 23% decline from SAR 1.648 billion in the same period last year. The company’s net profit after Zakat and tax dropped 34% year-on-year to SAR 409.1 million in Q3 2021, Argaam reported.
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