SADAFCO's H1 strong performance driven by all product categories, no plans for price hikes: CEO

CEO Patrick Stillhart

Patrick Stillhart, CEO of Saudia Dairy and Foodstuff Co. (SADAFCO), said that the company witnessed strong performance in all product categories during the first half ended in September 2022, as the improvement in sales efficiency led to a 31% increase in sales.

He said that contributions by each product category to the company's financial performance were as follows: milk (28%), ice cream (25%), tomato paste (28%), while sales of milk and tomato paste achieved similarly strong performance. Mlekoma Group's contributions increased in terms of sales by more than 90%.

There are several factors that contributed to the company's strong profit, including adding new sales routes, back-to-school season, in addition to launching new products. Furthermore, the well-studied purchase of main raw materials positively contributed to profitability, as well as cost control amid the increase in sales, the CEO said, in an interview with Argaam.

Improvements in the distribution outlets led to achieving efficiency in transporting products to the markets, which led to stronger revenues in the second quarter, in addition to adding new sales trucks and using new freezers for ice cream, he added.

Stillhart stated that SADAFCO raised prices in 2021 and then twice in 2022 to cover the increase in input costs for the main products, noting that such hike, which stood at 20% then, was in line with competitors. He also said that his company does not intend to increase prices at this stage.

Asked about the continuing impacts of the supply chain crisis and inflation on the company, the CEO said: "We have ridden out the worst of the supply chain disruptions, and inflation is still continuing, but our strong financial position enables us to withstand such difficulties."

Stillhart also noted that work is underway in the new warehouse project in Makkah, and that it is expected to be completed in the current fiscal year.

SADAFCO reported a net profit after Zakat and tax of SAR 139.9 million for H1 ended Sept. 30, 2022, a 52% year-on-year (YoY) increase, compared to a SAR 92.2 million in the year-ago period. In Q2 2022/2023, net profit after Zakat and tax saw a 58% YoY surge to SAR 85.6 million, from SAR 54.1 million, according to Argaam's data.