Al-Jouf Agricultural CEO: Demand, margins likely to improve in coming periods

Mazen Badawood, CEO of Al Jouf Agricultural Development Co.

Al Jouf Agricultural Development Co. CEO Mazen Badawood expects demand for the company's products and profit margins to improve in the coming periods, supported by lower production costs as new crops enter production, despite continued pricing pressure from imported processed products, particularly frozen French fries.

Speaking to Argaam, Badawood said the company did not observe a material impact on product availability during Q2 2026 within the scope of its operations, noting that geopolitical developments and supply chain disruptions did not significantly affect raw material availability during the period.

On the company's financial results, he noted that the decline in net profit was primarily driven by higher cost of goods sold for processed products due to unusual weather conditions during the 2025 agricultural season.

He also noted the lower selling prices for processed products amid pricing pressure from imports, weaker French fries sales, and higher operating and Zakat expenses compared with the year-earlier quarter.

Badawood further indicated that pricing pressure on processed products, particularly French fries, due to competition from imported products negatively affected first-half results, estimating the impact at around SAR 24 million compared with the first half of last year.

Meanwhile, production costs were affected by the unusual weather conditions during the 2025 agricultural season, which had a significant impact on first-quarter results. However, the introduction of new crops at the end of Q2 2026 helped improve profit margins compared with Q1.

The CEO expects production costs to continue improving as larger volumes from the 2026 harvest season enter production, supporting stronger profit margins in the coming periods.

Badawood also pointed out that agricultural product sales are concentrated toward the end of Q2 and throughout the second half of the year, coinciding with the harvest and marketing season. He noted growth in olive oil and agricultural product sales and expects demand for processed products to continue growing in the second half, supported by sustained market demand.

Commenting on the subscription agreement signed with Almunajem Foods Co. for its entry as a strategic investor, Badawood said the agreement was signed and announced in recent days. Subject to obtaining all required approvals for the subscription, the company expects

the agreement to represent a strategic step for both companies and support their future operations.

According to Argaam data, Al-Jouf Agricultural’s net profit fell 78% YoY to SAR 11.5 million in H1 2026, from SAR 53.1 million a year earlier. Q2 2026 net profit declined 49% to SAR 9.5 million.