Almarai, a leading Saudi multinational dairy company, said that profit margins in export markets have improved due to higher sales in Egypt and Jordan during the first quarter (Q1) of the year, according to a report.

Despite lower GPM due to removal of Subsidy the company managed to deliver a healthy operating margins led by operating efficiencies, said Al Rajhi Capital, a leading financial services provider in the kingdom.

The SG&A (selling, general and administrative) reduced by SR10 million ($2.66 million) and impairment of financial assets reduced by SR28.4 million as there were no additional provisions required compared to Q1 FY2020.

“Almarai managed to post a marginal y-o-y growth in bottom-line and thereby beat our estimate of SR315 million significantly. This was mainly attributable to lower financing expense which reduced by SR36.1 million as a result of lower SAIBOR and lower debt levels due to ongoing deleveraging program,” Al Rajhi Capital said in the report.

“We expect expat exodus, reduced pocket size of Saudi consumers due to higher VAT and delay in school re-opening to affect the KSA segment growth, however export markets specially Egypt and Jordan should continue to deliver strong growth. We maintain our tp of SR55 per share on Almarai with a ‘neutral’ rating.” – TradeArabia News Service