The momentum we generated in 2023 will accelerate further next year as we reach full force in our strategy execution. Consequently, we are optimistic about our top-line growth, where we anticipate material improvement in volumes

Danko Maras


Strategic Execution driving Diversification and Profitability

The return of stability in markets and prices in 2023 enabled Almarai to dedicate greater attention and energy to its corporate growth strategy, which led to an improvement in both its top and bottom-line growth. With profits growing more robustly than revenues and financial and operational efficiencies having a positive impact, Almarai’s margins showed a healthy improvement, leaving the Group well positioned to execute on existing and new opportunities for growth.

Net income attributable to Almarai’s shareholders increased 16.4% to SAR 2,049 million for the full year, compared to SAR 1,760 million in 2022. Trading conditions, which started recuperating in 2022, continued their upward momentum this year, nonetheless substantial cost inflation persisted that required higher cover to offset the increase in expenses.

Our revenues in 2023 of SAR 19,576 amounted to a 4.6% increase on SAR 18,722 million in 2022. This excellent growth was led by Dairy and Poultry, mainly in the GCC countries. Stabilized global commodity cost trends and a positive product mix resulted in a healthier gross margin improvement by 90 basis points to reach 31% compared to 30% in 2022.

The operating profit percentage expanded even further by 160 basis points to reach 14%, a marked increase over 12% operating profit achieved in 2022. This increase in operating profit of 18.3% demonstrated the success of our efficiency initiatives and consistent implementation of meticulous cost control.

Net profit rose 16.4% driven by operating profit growth, but was partly offset by higher funding costs driven by an increase in the SAIBOR rate which increased substantially in 2023. Earnings per share, based on consolidated profit attributable to shareholders of SAR 2,049 million, were SAR 2.08 and diluted earnings per share came to SAR 2.05.

Cash Flow and Liquidity Management

  • Almarai’s operating cashflows increased substantially in 2023 to 23% of revenues, as compared to 20% of revenues in 2022
  • The growth in operating cashflow was equally matched by the growth in our investing cashflows which rose to 23% of revenue, driven solely by our investment in Poultry to double our capacity in the next three years
  • Notwithstanding the increased investment in Poultry, Almarai’s free cashflow continues to be positive for the year and contributed SAR 1.2 billion for the 2023 year

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Sales by Geography

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Flawless Execution of Well Received Sukuk

In July, we completed a heavily oversubscribed Sukuk as part of our USD 2 billion Trust Certificate Issuance Program, with the proceeds used to finance the redemption of our previous Sukuk. The issue was conducted to raise USD 750 million, and demand exceeded availability by 7.7 times.

The 10-year Sharia-compliant debt instrument was priced at 5.25%, which indicates a de facto credit rating of BBB+ versus our official BBB-.

The success of our Sukuk, which won the Asset Triple “A” Islamic Finance Award for 2023, further confirmed the market’s approval of our business strategy, recognizing our long term fundamentals and growth prospects, the quality of our balance sheet and investor trust.

Segmental Results

Our Dairy business unit reported revenue growth of 4.6% in 2023, notwithstanding ongoing industry-wide challenges that included further devaluation of the Egyptian Pound, impediments to supply and steep inflation in the cost of essential commodities and animal feed.

The economic recovery in our core markets played an important role in helping the Juice division to deliver a solid performance, with notable revenue growth in our fresh juices, making a material contribution to the business unit’s overall profitability and a 6.3% decline in revenue

Our flagship Poultry business had an outstanding year, thanks to a surge in volumes to new record highs. Revenue growth of 16.8% was particularly exceptional considering the high base reported in 2022.

Bakery also had a very good year, with revenues topping SAR 2.6 billion thanks to substantial volume and value growth across the entire portfolio of products.

Geographic Results

Normalizing conditions in our core GCC markets were accompanied by an increase in religious and other tourism, as well as a population growth. This spurred volume growth created a higher demand, particularly in our Retail and Foodservice channels. The latter has become very important in our coverage and reach in the region, having grown from a negligible contribution in 2017 to more than SAR 3.2 billion in 2023, and offering the potential to more than double this over the next five years.

Financial Outlook for 2024

The momentum we generated in 2023 will accelerate further next year as we reach full force in our strategy execution. Consequently, we are optimistic about our top-line growth, where we anticipate material improvement in volumes.

This will be accompanied by continuing efficiency gains enhancements, which we fully expect will result in the further amplification of our margins.

In the coming years, we continue to look for strategic investments aimed at building on our foundations for future growth in addition to our organic growth.

The Group’s net debt to EBITDA at the end of 2023 reflects our current under-leveraged position, but this is expected to change in future years as we take on new borrowings to finance our investments and growth strategy.