Riyadh-Mubasher: National Agricultural Development Co.’s (NADEC) net earnings for the second quarter of 2016 beat Al Bilad Capital’s estimates, according to a new report by the research firm.
The Saudi-listed food products company reported a year-on-year profit rise of 5.6% to SAR 37.1 million in Q2-16 from SAR 35.1million.
The investment company also upgraded NADEC’s share to SAR 24.9 to SAR 23.8, with an “overweight” recommendation.
Profit growth is attributed to reduced production cost, higher prices of agricultural products and boosted operational efficiency, despite higher fuel prices, according to the released report Wednesday.
Dairy and food manufacturing sales grew 4.9% in H1-16, while agricultural sector sales fell by 36.2%, due to the stoppage of wheat cultivation, which resulted in a 1.4% drop in consolidated revenues, Al Bilad reported.
“Compared with the previous quarter, the company's sales jumped 25.5%, as sales of dairy and food processing grew by 17.9% primarily supported by the huge Ramadan sales and changing consumption patterns during the summer period for dairy products and juices,” the report said.
