Almarai reports increased first-quarter profits

Saudi dairy congolmerate Almarai Company has reported higher profits for the first quarter compared with the same period of 2024, one year into a $5 billion, five-year expansion plan.

The Riyadh-based dairy company reported a 6 percent increase in net profits to SAR731 million ($195 million) and a 6 percent increase in revenues to SAR5.8 billion ($1.5 billion).

The higher earnings were a result of volume growth and improved Ramadan performance, led by fresh dairy, juice and poultry, the company said in an announcement to the Saudi Exchange. 

The growth was offset by a devaluation of the Egyptian pound in Almarai’s third-largest market, the two biggest being Saudi Arabia and the UAE.

“What stands out is that, even though continuous growth has decelerated a bit, it’s still continuous growth,” said Shahrukh Saleem, a portfolio analyst at Mashreq Capital.

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Almarai’s shares, which have been on a downward trend from a high of SAR58.90 at the end of January, hit a 12-month low of SAR52 following the announcement earlier this month of wide-ranging US import tariffs. The stock has now recovered somewhat and closed at SAR53.60 on Sunday.

In an earnings call, Almarai said that operating costs have been higher due to the launch of new products and expansion into different food categories, such as ice cream.

“Generally, it’s a very high capex company anyway just because of the nature of the business,” Saleem said.