Saudi’s Almarai Cites Sales Growth For 15% Profit Jump

Sales growth for dairy, poultry and juice products helped Almarai to post quarterly profit in line with analyst forecasts, the Saudi Arabian company said on Sunday, despite a fire at its bakery business in November.

The Gulf’s largest dairy company, which is benefiting from rising demand from Saudi Arabia’s 29 million population and has also gained market share elsewhere in the Middle East and North Africa, reported a near-15 per cent rise in fourth-quarter net profit.

In the three months to Dec. 31 the company made net earnings of SAR428 million ($114 million), up from SAR373.3 million in the same period of 2013, it said in a statement to the Riyadh bourse.

The average forecast in a Reuters poll of analysts was SAR427.7 million.

Almarai had previously said the fire that destroyed one of its bakeries and damaged another was not expected to have a “material adverse impact” on its financial position.

Its statement on Sunday said that higher expenses related to sales, distribution and administration had weighed on results, along with infrastructure expansion across different products and geographies.

Under a deal with U.S. soft drinks giant PepsiCo, the two companies will invest at least $345 million in Egypt over the next five years, it said in June.

For the full year, Almarai reported net profit of SAR1.67 billion, up 11.5 per cent on 2013. Sales were up 12.4 per cent from 2013.

Shares in Almarai, which last month proposed a cash dividend of SAR1 per share for 2014, fell 1.2 per cent on Sunday. The earnings statement was released after the market closed.