Sadafco records SR75m net profit in 2nd quarter ‘17

JEDDAH — Despite the drop in overall consumption levels, Saudia Dairy and Foodstuff Company (Sadafco) achieved consistent net margins in Q2 2017 in line with the previous quarters this year and last year.

Material input costs continued to move up during the quarter as against previous periods & with the market witnessing sustained decline in consumption pattern, the combined effect impacted the top and bottom lines in absolute terms. However, by carefully managing the other costs, Sadafco achieved similar margins at the gross and net profit levels compared to previous periods - a net profit of SR75 million in Q2 2017 as compared to SR81 million in the previous quarter, Q1 2017 & Sales of SR441 million during the second quarter as against SR453 million in Q1 2017.

“It is challenging to attain sustained margin levels in a period of muted consumption and stagnant market conditions. The additional price pressure from the surplus supply levels on the fresh milk side has contributed to top line squeeze, albeit, to a negligible extent,” said Wout Matthijs, Chief Executive Officer, Sadafco. “On the cost part, the global material input costs have continued their ascent, the effect of which we managed to balance through prudent scaling down on the other costs, while not compromising on our high quality standards.”

“We continued to maintain strong working capital ratios, healthy cash balance of SR526 million with zero leveraging & grew the shareholder equity YOY by 14.8%, (SR1.283 billion compared to SR1.119 billion from the same period last year (Q2 2016)”.

“We will continue our strong focus on improving internal efficiencies combined with seeking growth avenues that can benefit us in the long run, thereby creating more opportunities to enhance shareholders value”

Established in 1976, Sadafco is a leader in dairy and foodstuff manufacturing, importing, distributing and marketing in Saudi Arabia and has established a strong reputation and loyal following in the food and beverage industry across the GCC region. — SG