NADEC’s Q4 all-time high profit backed by strong revenue: CEO

Solaiman Al-Twaijri, CEO of National Agricultural Development Co. (NADEC)

National Agricultural Development Co. (NADEC) achieved its all-time highest profit in Q4 2023, driven by a 19% year-on-year (YoY) increase in revenue, CEO Solaiman Al-Twaijri told Argaam.

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The company is ranked second in the Saudi market and its overseas operations account for 9% of its revenue, Al-Twaijri indicated.

The Red Sea disruption impacted some of the company’s sources of raw materials and other packaging-related materials. However, NADEC mitigated these risks by maintaining inventory.

As for the fuel price amendment, NADEC indicated that these changes will directly and indirectly affect the company, Al-Twaijri said, noting that the dairy and food producer has several plans to maintain profitability.

To address the higher cost of finance, the company increased its capital and partially used the proceeds to settle the commercial loans. Thus, it has total loans of SAR 370 million as of Dec. 31, 2023, with a significant tendency to secure government loans through the Saudi Industrial Development Fund (SIDF) and the Saudi Agricultural Development Fund (SADF) to overcome the interest rate volatility.

NADEC is pursuing the implementation of its strategic plans and has already started the red meat operations with expansions expected over the coming months. The company also plans to enter the fruit and vegetables segment.

NADEC is forecast to maintain 2023 profitability in Q1 2024, the CEO indicated.

The company posted a net profit of SAR 302.1 million in 2023, compared to SAR 95.5 million a year earlier. The fourth-quarter net profit surged 393.5% to SAR 123.98 million from SAR 25.12 million in Q4 2022.