Almarai Company (2280) Q2 2025 earnings summary

Executive summary

• Achieved Q2 2025 revenue growth of 3% to SAR 5.288 billion, the highest in 13 quarters, and H1 2025 revenue of SAR 11.06 billion, led by strong performance in KSA, UAE, and Kuwait, and driven by volume increases.

• Net income rose 4% year-over-year in Q2 2025 to SAR 647 million, with H1 2025 net income up 4.9% to SAR 1.38 billion, and net income margin at 12.2%.

• Growth was driven by strong food (+12%) and bakery (+8%) segments, with poultry volumes up ~11% but flat revenue due to pricing pressures.

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

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

Financial highlights

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

• Gross margin for Q2 2025 was 32.4%, down from 33.0% in Q2 2024, due to higher ingredient and transportation costs.

• Free cash flow for H1 2025 was SAR 218 million, down from SAR 1,249 million in H1 2024, impacted by higher working capital and SAR 1 billion in Q2 capital expenditures.

• Net debt increased to SAR 10,764 million at Q2 2025, with net debt/EBITDA stable at 2.3x.

• Basic EPS for H1 2025 was SAR 1.39, up from SAR 1.33 in H1 2024.

Outlook and guidance

• Confident in continued growth for H2 2025, with poultry expansion and bakery price increases (SAR 150–200 million annualized impact) to support further growth and offset cost pressures.

• No planned dairy price increases; bakery pricing effective from July.

• Management expects continued margin pressure from diesel and ingredient costs but is implementing efficiency and alternative energy initiatives.

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

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