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In Saudi Arabia, Almarai recorded a 11.9% decline in net income in the second quarter due to higher expenses and financing costs, while revenue increased as the largest dairy products from the Middle East is reshaping its senior management.
Net profit after zakah and taxes for the period ending March 30 fell to 582.5 million Saudi riyals (570 million dirhams), the company said Sunday in a statement on the Saudi stock exchange, where its shares are negotiate. According to Bloomberg data, the estimates of income of 604.5 million riyals by two badysts for the second quarter were therefore not met.
Operating profit fell to 738.5 million riyals, down 3.4% from one year to the next. Revenues for the three-month period, however, increased 2.6% to Rs. 3.76 billion, followed by poultry and fresh dairy products, while the general weakness of the fruit juice market persisted in 2019.
The company attributed lower net earnings to higher operating and financial costs. Its selling and distribution expenses increased by 28.2 million riyals, an increase of 5.1%, due to "higher general marketing and sales support costs … other: increased by 11.4 million riyals, mainly because of greater losses from the sale of dairy herds. " I said.
Financing costs increased by 41.2 million riyals as a result of "higher interest-bearing debt after perpetual sukuk repayment, higher interest rate due to Sibor's increase and the lower interest rate. capitalization of the cost of financing qualified investment projects, "said Almarai on the stock market. declaration.
The company, which has experienced a steady decline in profitability in recent quarters, as its contributions to overall revenue from various lines of business shrinks, has reduced former employees in its efforts to bring it back to the growth of profits.
Almarai announced Sunday that its managing director, Alois Hofbauer, who took office in April, had resigned for personal reasons. Georges Schorderet will replace Mr. Hofbauer. Schorderet, who previously held the position of Chief Executive Officer and Chief Financial Officer, was appointed to Almarai's board of directors after deciding to retire earlier this year, the company added.
Almarai's board also appointed Majed Mazen Rasheed Nofal as deputy chief executive and promoted Paul Gay as chief financial officer, he added.
"The board believes that these changes in Almarai's management positions will ensure continuity while paving the way for its future strategy," he said.
In May, the board also approved a new five-year business plan of 7.1 billion riyals to reduce costs and return to earnings growth.
"Given the persistently difficult economic conditions in the region, the focus will be on efficiency measures and cost optimization throughout the plan period to ensure a permanent competitive advantage. ", said the group at the time.
The latest plan, the company said, is "consistent with the company's long-term investment cycle, calling for less expansionary investment and a focus on more efficiency and sustainability."
The board plans to fund the investments over five years, primarily through operating cash flow. Almarai will focus on replacing existing badets; adopt a greener energy footprint; the improvement of production capacities and capacities on farms and manufacturing facilities; improve product innovation and development as well as its distribution and transportation methods, he said.
Last Updated: July 7, 2019 13:46
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