Almarai headquarters
Almarai Co. reported a net profit of SAR 520.4 million in Q2 2022, which met AlJazira Capital’s estimates of SAR 514 million, standing slightly above average forecast of SAR 492.8 million, according to a recent research note.
The brokerage indicated that higher pricing and volumes partially offset the rise in commodity prices and operating costs.
In addition, export demand remained strong as the company boosted its sales prices and volume, achieving market shares in some categories.
Although the company was able to partially reduce higher prices of some categories, the gross profit margin is seen to face challenges in 2022 as a result of higher input costs.
AlJazira Capital expects Almarai to be able to minimize the impact of this pressure by enhancing its presence in trade channels such as food services and other product categories, in addition to controlling operating costs.
Accordingly, the company's ability to resume its expansion plan, focus on costs and expand its market share are key factors for improving performance over the coming period.
AlJazira Capital remained "Neutral" on Almarai, with a target price (TP) of SAR 52/share.
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