Almarai, the Saudi Arabia-based dairy and poultry group, saw revenue decrease during the second quarter due to lower exports and a deterioration in consumer sentiment.
Sales fell 4.2% to SAR3.76bn (US$1bn) from a year earlier, with the company noting tough market conditions overspilled from 2016, particularly in the dairy and juice sector. It also flagged the devaluation of the Egyptian pound as a factor.
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However, the company eked out a 2.4% rise in second-quarter net income to SAR674m from a year earlier despite the decline in reveue, and a 3.9% increase in operating profit, or EBIT, to SAR788m, according to its consolidated interim results issued at the weekend.
The company attributed the uptick in profit to lower cost of sales, lower commodity prices and enhanced production efficiencies.
All of Almarai’s business segments saw a drop in profits for the quarter, led by a 91.1% slide in the poultry sector, a 10.2% decrease in bakery and a 9.9% decline in dairy and juice.
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“Almarai launched at the end of 2016 a productivity improvement/cost-cutting program with the objective of improving our cost base by SAR500m over the next two years”, the company said in a statement accompanying the results. It envisages those measures will “partially neutralise the expected negative impacts” in the second half of 2017.
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