Almarai Company (2280) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached SAR 5.21 billion, up 9% year-over-year, with net income rising 17% to SAR 570 million and operating profit up 15%, driven by volume-led growth and effective cost management.

• Year-to-date revenue grew 8% to SAR 15.82 billion, net income up 12% to SAR 1.88 billion, and operating profit up 11%, with EBIT margin at 15% and net income margin at 12%.

• Growth was broad-based across all product categories, channels, and geographies, except Egypt, which was impacted by currency devaluation.

• The group operates across dairy, juice, bakery, poultry, and other food segments, maintaining leading market share in Saudi Arabia and presence in GCC, Egypt, and Jordan.

• Positive momentum is expected to continue, supported by stable macroeconomic conditions and improved business performance.

Financial highlights

• Q3 2024 gross profit margin improved to 32%, with EPS up 18% to SAR 0.58; net profit margin reached 11%.

• Free cash flow for Q3 2024 was SAR 316 million, with YTD free cash flow at SAR 1,565 million; operating cash flow for Q3 surged 307% year-over-year to SAR 1.34 billion.

• Net debt/EBITDA ratio improved to 2.06, with net debt reduced by SAR 0.5 billion year-over-year; net debt at end Q3 2024 was SAR 9.47 billion.

• Total assets as of 30 September 2024 stood at SAR 35.4 billion, with total equity of SAR 18.6 billion.

• Dividend of SAR 1 per share (SAR 1 billion total) was approved and paid for 2023.

Outlook and guidance

• Management remains confident in sustaining current margin levels (14-16% EBIT) but notes seasonality may soften Q4 results.

• Cautious on commodity and fuel price volatility, especially oil, diesel, and butter, which could impact future costs.

• Ongoing investments in capacity, product lines, and innovation are expected to support future top and bottom line growth.

• All GCC markets maintained positive momentum, with KSA and UAE leading growth.

• Acquisition of Hammoudeh Food Industries in Jordan for SAR 263 million announced, pending regulatory approvals.