The quarterly profits of the Saudi Dairy and Food Products Company increased by 48.11% to reach 56.2 million riyals in the second quarter of 2022, compared to 37.9 million riyals in the corresponding period of 2021.
According to Arabia Net, on a quarterly basis, SADAFCO's profits fell by 10.35%, from 62.7 million riyals in the previous quarter.
Operating profits in the second quarter amounted to 89.8 million riyals, compared to 44 million riyals in the second quarter of 2021, a growth of 103.8 percent.
The company said in a statement published on the Saudi Tadawul Group website that the results in the first quarter reflect a significant positive improvement compared to the same quarter of last year due to an increase in sales by 28% due to the focus on distribution and the strong presence in the supermarkets of the company's main products; The increase in sales volume also reflects the increase in market share across all products from milk, ice cream, tomato paste and other products, with the resumption of all activities after the end of the Corona pandemic; small increase in selling prices; focus on e-commerce; As well as focusing on foreign markets. Operational efficiency of using distribution vehicles in the sales paths until they reach the market.
The profit margin amounted to 32% compared to 30% for the previous year, despite the increase in raw material costs and the pressures resulting from the rise in the overall level of inflation, by raising the selling prices of some selected products; Increased focus on selling highly profitable products such as ice cream, and production efficiency in both Jeddah factories.
Selling and distribution expenses decreased as a percentage of sales (12.8% compared to 15.6% last year), while the value increased by 3.7 million riyals due to the increase in sales and general inflation. For example, hiring new sellers, depreciation expense on new selling vehicles, refrigerators, etc.
General and administrative expenses witnessed a decline as a percentage of sales (5% compared to 6% last year), while the value increased by 2.5 million Saudi riyals, an increase of 8%, which reflects the upward increase in inflation rates. The main components of this increase are personnel related expenses and the increase resulting from the development of IT security systems.
The company said that the financing cost increased by 26.3 million riyals, as a result of a change in the fair accounting value of the rights sale option that enables existing minority shareholders in our subsidiary Mellikoma Group in Poland, to exercise their right to sell the remaining 24% of ownership to SADAFCO. This increase in fair value is due to the exceptionally positive performance (sales and operating profit) of the Millikoma Group until 30 June 2022. Going forward, we expect business conditions to return to normal in Poland.
