The firm saw increased sales in all business areas, and increased profit in all areas except poultry, which saw losses grow as Almarai continued its programme of investment. But the fourth quarter of the year brought better news for Almarai’s poultry operations, with losses falling 72%.
“Overall the company is satisfied with its business performance which is in line with its strategic five years plan that contributed in increasing production capacity to serve our valuable customers and leads to strong growth indicators of increased sales of 12.4%, increased gross profit of 14.4% and increased net income of 11.5% over the year 2014 compared to 2013,” said Almarai’s results statement.
“The growth in net income for the year ended 31 December 2014 of 11.5% compared to the previous year is also due to the growth in sales of 12.4%, from core business segments, where sales growth in poultry, dairy and juice, and bakery sales rose by 29.1%, 12.1% and 6.1%, respectively. For the year; the net profit increased for all business segments except poultry whose loss increased by 17.3%,” the statement added.
Dairy and juice continued to dominate Almarai’s operations, accounting for US$2.64bn of its sales last year, followed by bakery products on US$407m and poultry on US$272m. Full-year losses in the poultry division amounted to US$105.6m, with losses in Q4 cut to US$19m.
Saudi Arabia made up the bulk of Almarai’s income with US$2.2bn of sales, up 11.3% from US$1.9bn in 2013. Sales in other GCC countries were up 15.6% to US$883m, with sales in other countries on US$315m, up 10.7%.
Fire losses insured
Within the full annual results, the firm also commented on the fire which destroyed a large part of its Jeddah facilities last year: “On ... 9 October 2014 a fire incident occurred at one of the manufacturing facilities in Jeddah. The fire resulted in damage of certain assets, having a carrying value of [US$56.9m], and loss of profits... The insurer has acknowledged the event and has confirmed that, in light of investigations carried out by the insurer’s loss adjuster and forensic Investigator, the insurer has no ground to consider that insurer’s liability will not engage under the insurance policies.”
Last year Almarai expanded its external animal feed operations, buying up land worth US$47.5m in the US to grow alfalfa for export to Saudi Arabia, and signing a US$1.3bn deal with King Abdullah Port in the kingdom to build a facility to process its feed imports. It also embarked on a US$354m joint venture with PepsiCo to develop new facilities in Egypt.