Saudi Arabia's Almarai 2020 net profit boosted by COVID-19 ‘pantry loading’

Saudi Arabia’s Almarai, the region’s largest dairy company, reported a net profit increase of 10 percent to SR1.984 billion ($530 million) after Zakat and tax for the fiscal year 2020. (@almarai)

• This was as a result of 7 percent year-on-year revenue growth, mainly due to foods, long-life dairy and poultry
• Pratik Khandelwal, senior analyst at Al Rajhi Capital, said the results were “broadly in-line with our expectations”

JEDDAH: Saudi Arabia’s Almarai, the region’s largest dairy company, reported a net profit increase of 10 percent to SR1.984 billion ($530 million) after Zakat and tax for the fiscal year 2020.
This was as a result of 7 percent year-on-year revenue growth, mainly due to foods, long-life dairy and poultry.
In Q4 2020, net profit after Zakat and tax grew by 8 percent year-on-year to SR335.9 million, as revenue grew by 3.1 percent year-on-year, helped by growth in Egypt, Jordan and export countries.
Pratik Khandelwal, senior analyst at Al Rajhi Capital, told Arab News that the results were “broadly in-line with our expectations and higher than our pre-COVID level forecast.”
“Almarai is one of the companies which was overall positively impacted from the COVID-19 as pantry loading during lockdown drove demand locally and in the export market,” he said.
The number of expatriates working in Saudi Arabia fell by 257,200 during the third quarter of 2020, and Khandelwal said that if this trend continued it would impact Almarai’s growth.
However, the senior analyst said that the resolution of trade between the Kingdom and Qatar could be a big positive for the company. “At the outset, it looks that Almarai should benefit but we are waiting to hear from the company how they see the Qatar market now as there would have been many other players (who) entered over the last couple of years which would pose a competitive environment. So, it’s difficult to quantify the impact now.”
Khandelwal also said that the company’s margins could be hit by the increasing price of raw materials, especially alfalfa, and this could contribute to a slowing of growth in 2021.