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Monday, Aug 11, 2025

SADAFCO net profit climbs 43.5% as sales surge

SADAFCO net profit climbs 43.5% as sales surge

Saudia Dairy and Foodstuff Co. saw a 43.5 percent surge in net profit during the final three months of 2022 on the back of rising sales, the company has announced.
SADAFCO recorded a net profit after tax of SR78.3 million ($20.88 million) in the three months to the end of December, compared to SR54.6 million in the same period in 2021.

Sales increased by 25.8 percent compared to a year prior to reach SR654 million, according to a recent announcement on the Saudi Stock Exchange known as Tadawul.

This incline was “achieved through continuous focus on sales efficiency, route optimization and channel profitability,” stated the release on Tadawul, adding: “The quarter witnessed a normalization in sales and profitability of Mlekoma as commodity prices declined in line with the global trend.”

Polish dairy producer Mlekoma was acquired by SADAFCO through its subsidiary company SADAFCO Poland in 2018.

The Mlekoma group owns two plants specialized in the production of powdered, condensed and fluid products as well as whole milk, cream, butter milk and fat filled powders.

Despite a significant drop in Mlekoma’s profitability compared to a year earlier, the gross margin remained stable at 30 percent versus 30.8 percent in the same quarter last year.

The financial statements of SADAFCO indicated a healthy cash flow, with a strong cash position of SR634 million, including short term investments of SR258 million.

The company’s finance income significantly rose by SR2.9 million as a result of higher returns on investments in Murabaha deposits.

SADAFCO attributed its positive finance cost to strengthening of Polish Zloty versus the Saudi riyal compared to the previous quarter.

“We remain vigilant in managing the inflationary pressures in the global markets,” noted the company statement.

It added: “Our financial position has enabled us to take advantage of the deflationary trend in the commodity market to manage higher profitability in the coming quarters.”

Jeddah-based SADAFCO operates sales and distribution depots in 24 locations across Saudi Arabia, Bahrain, Qatar, Jordan, and Kuwait. Its products are also exported to several countries in the MENA region.

The uplifting performance of SADAFCO stands in line with Saudi Arabia’s food industry, as well as that of the region.

The Kingdom’s food and beverage sector increased 6.3 percent in the first half of 2022, according to the Saudi Arabia’s Small and Medium Enterprises Authority, also known as Monsha’at.

In addition, there has been a growth in the Gulf Cooperation Council region’s food market “due to the rising population, increasing awareness of healthy eating habits and increasing food consumption,” according to a Koncept Analytics report published in September 2022.

“In 2021, the dominant share of the market was held by Saudi Arabia,” said the report, also noting that as the Kingdom has a population with significant levels of wealth and high disposable incomes, its consumption food industry would continue to grow.
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