Saudi's Almarai sees 2.9% rise in Q1 net profit

Almarai, Saudi Arabia’s largest food producer by market value, on Saturday reported a 2.9 percent increase in first-quarter profit. Net income rose to SR242.1m from SR235.2m in the year-earlier period, the company said in a statement to the Saudi bourse website. The net profit figure represented a decrease of 15.2 percent compared to the fourth quarter of 2011. First-quarter sales increased 17 percent to SR2bn from SR1.7bn in the same period last year, it added. Almarai said the reason for the lower net profit compared with the previous quarter was "consumption seasonality and the continued impact of higher commodity prices". The higher sales revenue growth was driven by the continued expansion of its distribution network across the GCC, it added. In particular, sales were driven by bakery growth in the Gulf countries and poultry expansion in Saudi Arabia. However this also resulted in higher selling and distribution costs, the statement said. Overall, Almarai said it was "satisfied" with growth indicators, business development and performance in the quarter. Last month, Almarai said it had raised its stake in a joint venture with PepsiCo to 52 percent from 48 percent. Almarai said it had increased its shareholding in International Dairy and Juice (IDJ) through “an additional equity contribution by $22.4m". IDJ was created in February 2009 between Almarai and PepsiCo, focusing on new business opportunities in dairy and juice products in the Middle East, Africa and Southeast Asia - excluding the GCC countries.