Saudia Dairy and Foodstuff posts 22% growth in full-year profit

Saudia Dairy and Foodstuff (SADAFCO) posted 22.67% growth in net profit to 265.11 million riyals ($70.7 million) for its financial year ending March 31, 2020 compared to 216.11 million riyals for the previous year.

The company said in a bourse filing on Sunday (May 3) the outbreak of COVID-19 had a “minimal impact” on its results as it “only really started being felt in the last fortnight in March”.

SADAFCO’s business is in dairy, ice-cream, and tomato paste.

Net profit for its financial year was driven by higher sales and margins. Net sales of milk went up 14%, ice-cream 15% and tomato paste 6%, which all contributed to an overall increase of 12%, said the company.

Sales rose by 13.41% to 2.06 billion riyals versus 1.81 billion riyals.

“Margins improved from 32% to 33.5%, driven by lower promotional intensity in the milk category and a higher proportion of sales of ice cream, delivered through distribution expansion across our markets,” it said.

Selling and distribution overheads increased from 266 million riyals to 301 million riyals, a rise of 13%, mainly due to higher manpower costs associated with delivering higher sales and increased depreciation relating to more sales vans and ice-cream freezers being deployed in the market.

The company said it has provided additional provision for trade receivables of 12.7 million riyals due to the current economic situation amid the COVID-19 crisis.

SADAFCO is based in Saudi Arabia and has operations across the Middle East. It also has a subsidiary in Poland. The company markets its products under the brands Saudia, Crispy, Baboo, and Majestique.

© SalaamGateway.com 2020 All Rights Reserved