Almarai Co. on Sunday reported profit falls across both its the fourth quarter of 2018 and full year 2018 results.
The food and beverage firm logged SAR 369.6 million ($98.54 million) in net profit after zakat and taxes between October and December 2018, registering a drop of 27.93% from SAR 512.9 million ($136.74 million) in the same period of 2017.
Revenues merely slipped by less than 1% year-on-year to SAR 3.389 billion in Q4-18 from SAR 3.419 billion, Almarai said in a filing to the Saudi Stock Exchange (Tadawul).
Almarai attributed the profit fall to lower revenues on the back of a general market contraction particularly the dairy and juices segment as well as traditional selling options, despite a strong performance in the poultry sector.
The company added that its total profit fell 7.5% to SAR 1.235 billion due to higher cost of importing feedstock as well as increased cost of human capital and amortization. This was offset slightly by improved cost management on behalf of Almarai Co. and enhanced production efficiency, it said.
Almarai’s operating profits dropped 22% to SAR 465.9 million in Q4-18 from the prior year period.
As for the full year 2018, the Saudi packaged foods company registered SAR 2.009 billion in net profit after zakat and tax, down 7.95% year-on-year from SAR 2.182 billion, while revenues decreased 1.5% to SAR 13.723 billion from SAR 13.936 billion in 2017.
Almarai ascribed the full-year profit fall to lower revenues due to a decline in sales exports, additional promotional campaigns, and an overall change in the population as well as a market contraction in terms of traditional selling methods.
Total profit fell 2.5% to SAR 5.45 billion, while operating profits decreased 4.7% year-on-year to SAR 2.461 billion in 2018, the statement indicated, noting that the decline in total profit for 2018 was similar to that of the fourth quarter.
Almarai had previously reported a 4.2% decrease in profits in Q3-18 to SAR 1.45 billion from SAR 1.51 billion in the same period of 2017 due to lower revenues and higher expenses.
By 10:37 am Saudi time, Almarai’s stock retreated 4.11% to SAR 53.70.