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Saudia Dairy and Foodstuff Co. announces the interim financial results for the period ending on 31-12-2017 (Nine Months)

Element Current quarter Similar quarter for previous year % Change current Previous quarter % Change previous
Net profit (loss) 58,304,000 68,015,000 -14.28 74,737,000 -21.99
Gross profit (loss) 149,442,000 158,981,000 -6 171,324,000 -12.77
Operational profit (loss) 60,763,000 74,059,000 -17.95 77,144,000 -21.23
All figures are in Saudi Arabia, Riyals
Element Current period Similar period for previous year % Change
Net profit (loss) 210,277,000 230,422,000 -8.74
Gross profit (loss) 495,949,000 523,015,000 -5.17
Operational profit (loss) 217,837,000 242,751,000 -10.26
Earning or loss per share, Riyals 6.48 7.07 -
All figures are in Saudi Arabia, Riyals
Element EXPLAINATION
Reasons of increase (decrease) for quarter compared with same quarter last year The reason of decrease in profit for the 3rd quarter is mainly due to marked contraction in the consumer base, driving lower consumer spending and aggressive unprofitable discounting by competitors, we are pleased to deliver a respectable 13.9% net profit (15.6 % for the same quarter last year). A healthy but reduced gross margin of 35.6% despite increased commodity prices compared to 36.5% last year was also achieved. Income from deposit of surplus cash contributed SAR 1.6 million. Zakat charge is lower by SAR 4.6 million due to lower zakat base.
Reasons of increase (decrease) for period compared with same period last year The reason in decrease in Net profit for the nine months of SAR 210 million and 16% of sales compared to the previous period of 17% of sales is mainly due to decline in sales by 3.2% compensated by a corresponding decrease in expenses due to improved controls.
Reasons of increase (decrease) for quarter compared with previous quarter The reason of decrease in net profit for the quarter compared to previous quarter is market challenges of lower consumer spending and heavy competitor discounting became more intense during this quarter which resulted in a decline in Net Profit margin of 13.9% from 16.9% compared to previous quarter. Gross margin was also impacted negatively by 3.2% compared to last quarter due to increase in commodity prices. General & administration expenses decreased by 7.8 % due to improved control. Selling and distribution expenses also decreased 6.7% due to lower sales.
Reclassifications in quarterly financial results Certain of the prior period amounts have been reclassified to conform to the presentation in the current period, wherein we converted from SOCPA to IFRS.
Other notes Sales for the 3nd quarter is SAR 420 million compared to SAR 436 million for the same quarter last year a decrease of 3.7% and nine months period sales of 1,314 million compared to 1,357 million for the same period last year a decrease of 3.2%.
Shareholder equity (after minority interest) for the current period is SAR 1.277 billion compared to SAR 1.188 billion for the same period last year an increase of 7.5% (although in this quarter an additional SAR 65 million interim dividend was distributed). Total Comprehensive Income for the 3rd Quarter is SAR 58.1 million compared to SAR 69.6 million for the same quarter last year a decrease of 16.5% and previous quarter profit of SAR 75 million a decrease of 22.5% and for nine months is SAR 210.2 million compared to SAR 235.6 million a decrease of 10.8% out of which a major part was attributable to IFRS adjustment on EOSB.
The results for the quarter and nine months continue to reflect SADAFCO strategy to make profitable sales, and to protect both our market share and strong financial position. The deflationary trend in dairy and food prices triggered by irrational discounting by the competition, continued further reductions in the consumer base and increases in energy and manpower costs, will all put additional pressure on future growth and margins. However, despite the overall market conditions, we have managed to deliver a robust net margin of 16% for the nine months. Given our strong financial position we are poised to handle these challenges effectively.
Our key products continue to strengthen their market share. In addition to profitable sales, our primary areas of focus remain on cost, credit control and operational efficiency. The company has a healthy cash position of SAR 472 Million with zero leveraging.

The Capital Market Authority and the Saudi Stock Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.

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