Almarai Company (2280) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue grew 3% year-over-year to SAR 5.288 billion, the highest in 13 quarters, with H1 2025 revenue at SAR 11.06 billion, up 4.2%, led by strong performance in KSA, UAE, and Kuwait.

• Net income for Q2 2025 rose 4.2% to SAR 647 million, with H1 2025 net income up 4.9% to SAR 1.38 billion and margin improvements across key segments.

• Maintained market share leadership across all major categories in KSA, including Dairy, Juice, Food, Bakery, and Poultry.

• Growth was driven by Food and Bakery categories, with positive contributions from Modern and Traditional Trade channels.

• Continued innovation pipeline with new product launches in dairy, bakery, poultry, and the Yakut evaporated milk umbrella brand.

Financial highlights

• Operating profit for Q2 2025 increased 3% to SAR 813 million, with H1 2025 operating profit up 1.5% to SAR 1.69 billion; EBIT margin steady at 15.4%.

• Gross profit margin for Q2 2025 was 32.4%, with net profit margin at 12.2%; H1 2025 net profit margin at 12.5%.

• Free cash flow was negative SAR 383 million in Q2, with H1 2025 free cash flow at SAR 218 million, reflecting higher capex.

• Net debt increased to SAR 10.76 billion at Q2 2025, with net debt/EBITDA stable at 2.3x.

• Food (+12%) and bakery (+8%) segments delivered strong growth; poultry volume grew nearly 11% but net revenue was flat due to pricing pressure.

Outlook and guidance

• Confident in continued growth for the second half, with poultry capacity expansion and bakery price increases expected to add SAR 150–200 million annually.

• No dairy price increases planned; focus remains on volume and innovation.

• Expansionary capex cycle continues, with available credit facilities increased to SAR 6.8 billion at H1 2025.

• Management expects continued growth in core GCC markets, with focus on operational efficiency and innovation.

• The independent auditor's review found the interim financial statements fairly presented with no material misstatements.