NADEC profit soars to SAR 302.1M in 2023; Q4 at SAR 124M

National Agricultural Development Co. (NADEC) posted a net profit of SAR 302.1 million in 2023, compared with SAR 95.5 million a year earlier.

The rise was due to a 19.20% growth in dairy and food segment revenues and a 6.03% increase in agricultural segment sales.

The cost of sales to revenue ratio retreated by 7.02% year-on-year (YoY) in 2023, mainly due to a decrease in materials consumed because of lower material prices and higher production efficiency.

In 2023, the company received a one-time government subsidy of SAR 19.46 million to cover previous years' animal feed purchases.

In addition, NADEC raised its share of the joint project's profits to SAR 21.74 million from SAR 3.30 million in 2022.

NADEC completed the Zakat assessments from 2014–2018 by the end of 2023. Accordingly, it reported reversals of SAR 26 million.

Meanwhile, selling and marketing expenses rose mainly due to the increase in distribution costs and spending on marketing activities and promotional expenses. However, selling and marketing expenses as a percentage of sales declined by 0.62% YoY.

General and administrative expenses expanded in 2023 by 53.36% YoY on rising staff costs and professional consulting fees. The rise was mainly cited in the company's spending on future strategic projects.

The subsidy receivables amounted to SAR 40.5 million in 2023, compared to SAR 7.1 million in 2022.

NADEC recognized the impairment of SAR 24.03 million for idle assets and nonmoving construction work in progress.

Finance costs increased in 2023 by 55.67% YoY, mainly due to the increase in interest rates resulting from higher SAIBOR rates.

The fourth-quarter net profit surged 393.5% YoY to SAR 123.98 million from SAR 25.12 million in Q4 2022.

Compared to Q3 2023, the company’s net profit rose 64.7% from SAR 75.27 million.

Shareholders’ equity, no minority interest, rose to SAR 3.59 billion by the end of 2023 from SAR 1.29 billion in the year-earlier period.

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