Almarai Company (2280) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached SAR 5,767 million, up 6% year-over-year, with net income rising 6% to SAR 731 million, driven by strong performance in core GCC markets, especially Saudi Arabia and UAE, and robust execution during Ramadan.

• Growth was broad-based across geographies and product categories, led by fresh dairy, juice, food, bakery, and poultry.

• Maintained leading market share positions in all major categories in KSA, including dairy, juice, food, bakery, and poultry.

• Operating profit increased 1% to SAR 874 million, with margin pressure from higher operational and energy costs, mainly transportation.

• Effective cost management and increased capitalization of interest cost supported net profit despite higher energy costs and EGP devaluation in Egypt.

Financial highlights

• Revenue grew 6% year-over-year to SAR 5,767 million; gross profit up 4% to SAR 1,769 million.

• Net income attributable to shareholders rose 6% to SAR 731 million; EPS increased 10% to SAR 0.74.

• Operating cash flow for Q1 2025 was SAR 1,093 million, down 24% year-over-year; free cash flow turned negative at SAR -165 million due to increased capital investments and seasonal working capital outflows.

• Net debt increased to SAR 10,016 million, with net debt/EBITDA at 2.1x and net debt/equity at 51%.

• Dividend payout ratio for 2024: 43%, fully paid, with SAR 1,000 million distributed.

Outlook and guidance

• Management expects to fully offset the SAR 200 million annual diesel cost increase through operational efficiency programs.

• Gross margin is expected to stabilize, with no anticipated erosion versus 2024, supported by efficiency initiatives.

• Poultry capacity will increase by 50–70 million birds annually by end of 2025, supporting future growth.

• Capital expenditure is rising in line with the long-term deployment plan, supporting future expansion.

• Continued focus on expanding ice cream and long-life dairy market share and innovation pipeline.