Almarai Company (2280) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached SAR 5.15 billion, up 8% year-over-year, with net profit rising 11% to SAR 620 million, driven by strong performance in Saudi Arabia, Egypt, and GCC markets.

• H1 2024 revenue totaled SAR 10.61 billion, an 8% increase, and net profit grew 10% to SAR 1.31 billion, reflecting robust growth across all segments and geographies.

• All major segments—dairy and juice, bakery, and poultry—contributed to improved net income margins and overall profitability.

• Free cash flow remained positive, though slightly lower due to acquisitions and higher CapEx.

• New product launches, channel optimization, and warehouse acquisitions supported growth and expanded product offerings.

Financial highlights

• Q2 2024 operating profit rose 10% to SAR 793 million, with operating margin improving to 15%.

• H1 2024 operating profit increased 9% to SAR 1.66 billion; net profit margin stable at 12%.

• Free cash flow for Q2 2024 was SAR 1.25 billion, supported by strong operating cash flow and improved working capital.

• CapEx for Q2 was SAR 817 million, mainly for poultry expansion; TTM CapEx at SAR 3.1 billion.

• Earnings per share for H1 2024 reached SAR 1.33, up 10% year-over-year.

Outlook and guidance

• Management expects continued volume-led growth and margin improvement for the remainder of 2024, supported by innovation, channel expansion, and operational efficiency.

• Gross margin is expected to remain at or improve from the current 32%-33% range, aided by lower raw material costs and positive product mix.

• Focus remains on operational efficiency, prudent cost management, and ongoing investment in marketing and new product development.

• Enhanced distribution capabilities and product range expected following warehouse acquisition.

• Management continues to monitor currency devaluation risks, especially in Egypt.