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Almarai to increase poultry output by 35%

Almarai intends to increase its poultry output 450 million birds by 2027 Pexels/Magda Ehlers
Almarai intends to increase its poultry output 450 million birds by 2027
  • Q4 profit up 16%
  • Saudi poultry market share of 35%
  • $4.8bn investment strategy

Almarai, the Middle East dairy and food production group, announced plans to increase its poultry output by 35 percent this year as it continues with its multi-billion-dollar expansion plans. 

The Riyadh company reported fourth-quarter profit of SAR430 million ($115 million), an increase of 16 percent, as revenue rose 4.8 percent to SAR5.15 billion. 

It announced a 12.8 percent year-on-year increase in annual profit of SAR2.31 billion ($616 million) thanks to cost efficiencies and improved volume-led revenue growth.

In its conference call this week, Almarai said it plans to increase its poultry capacity from 250 million birds to 300 million in the coming year, through establishing new farms and upgrading current ones.

Output will increase from its current level of 200 million birds per year to 270 million, targeting processing 450 million birds by 2027. 

Almarai said it leads the poultry sector in Saudi Arabia with 35 percent market share; 66 percent of its revenue comes from the kingdom. 

In March last year, it launched a five-year, $4.8 billion investment strategy to improve growth, optimise sales and enhance financial performance across multiple segments.

It also plans to move into new food segments and introduce new technologies. 

In December, Almarai announced plans to build domestic production facilities for seafood, beef and lamb, which will become operational in two years.

Aljazira Capital, in its analysis this week, said the investment plan “is expected to boost profits between 2024 and 2028 at a compound annual growth rate of 16.4 percent”.

The investment will be financed mostly through its operating cash flows and is expected to offset the adverse impact of diesel price increases.

Shares in Alamarai traded at SAR55.60 on Wednesday, a slight drop of 0.71 percent. It has a market capitalisation of SAR55.36 billion ($14.76 billion).