Mubasher: Almarai has reported an 18.5% year-on-year earnings to SAR 628.8 million, which is higher than the estimates of both the NCBC and consensus of SAR 543 million and SAR 530 million respectively, according to a recent report issued by NCB Capital.
The report said that the growth in Q2 profits is supported by a 10.3% increase in sales of SAR 4,025 million in-line with the NCBC estimates of SAR 4,03 9 million as well as a rise in gross margin expansion.
“Gross margins expanded by 149 bps YoY to 39.5%, representing the highest 2Q margins since 2010. This compares to our estimates of 37.0%,” the report said, adding “We believe this growth is driven by strong seasonal demand during Ramadan.”
Sales of the bakery segment grew by 16.2% YoY to reach SAR 461 million, while the dairy and juice sales increased by 9.5% YoY to SAR 3,120 million, according to NCB Capital’s report.
“Losses of the poultry segment continued to increase YoY to SAR 76.2 million in 2Q16 vs. SAR 54.3 million in 2Q15. This represents a loss margin of 20.2% vs. 17.3% for 2Q15, impacted mainly by the imported frozen poultry which are 25-35% cheaper than the domestic products,” it added. On a quarterly basis, losses shrank from SAR 104.3 million in 1Q16, which shows signs of a recovery in this segment.
