Almarai Company (2280) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached SAR 6,160 million, up 7% year-over-year, driven by strong volume growth in poultry, dairy, and robust performance in Egypt, KSA, and UAE, with minimal impact from regional conflict.

• Net income was stable at SAR 732 million, with EBIT margin at 14% and net margin at 11.9%, reflecting disciplined cost control and higher transportation costs.

• Growth was led by poultry, fresh dairy, and the newly acquired water segment, with modern and traditional trade channels contributing significantly.

• Free cash flow was SAR 173 million, reversing a negative position last year, supported by improved operating cash flow and declining but elevated CapEx.

• Acquisition of Pure Beverages Industry Company Limited completed, expanding the beverage portfolio and strengthening market position.

Financial highlights

• Gross profit increased to SAR 1,866 million, with gross margin at 30.3%-30.4%; operating profit was SAR 875 million, flat year-over-year.

• EBIT margin at 14%, within target range; net income margin at 11.9%.

• CapEx at SAR 956 million for Q1 and SAR 4,235 million TTM, historically high but trending downward; working capital increased slightly.

• Strong cash position of SAR 1.6 billion at quarter-end, supported by precautionary drawdown amid uncertainty.

• Net cash from operating activities was SAR 1.28 billion, up 17% year-over-year.

Outlook and guidance

• Management expects continued volume growth, especially in poultry and Egypt, with further ramp-up in protein and water capacity.

• Ongoing cost pressures from freight, energy, and regional conflict are anticipated, with potential for price increases if inflation persists.

• Dividend payout ratio guided at 40%-60% of net income, with a proposed 15% increase in dividend.

• Focus on cost management, supply chain risk mitigation, and sustainability initiatives.

• Non-poultry protein expected to grow from 1-2% to double digits of segment revenue over 2-3 years.