Description Current Year

2023

9 Months Previous Year

2022

9 Months For the year ended 31 Mar'23

12 Months

Sales/Revenue 2,111,480 1,979,816 2,648,013

Total Profit (Loss) 750,670 621,459 822,709

Profit (Loss) Operational 339,331 279,893 371,011

Net Profit (Loss) after Zakat and Tax 324,982 220,734 310,464

Total Comprehensive Income 322,287 220,500 306,193

Profit (Loss) per share 10.24 6.82 9.65

SADAFCO’S performance is analyzed as follows:

1. Dairy & Foodstuff business representing Milk, Ice cream, Tomato Paste & others.

2. Commodity business representing Polish operations.

Dairy & Foodstuff

• Higher sales by 10.8% value driven mainly by volume and market share gain across all categories.

Commodity business (SADAFCO Poland/ Mlekoma Group):

As explained above the sale of Poland has declined due to low commodity prices, by 25.8%.

Net profit of SAR 374.1Mln is higher by 49.3% vs last year’s SAR 250.5 Mln as a result of:

• Gross margin increased (38.8 vs. 33.5%) because of lower raw material costs, favorable product and category mix and cost efficiencies in the factories.

• Selling & distribution expenses increased to 15.4% of net sales vs 14.0% last year. The increase over last year reflects commitment to higher investments on marketing coupled with distribution expansion via new routes, sales vans and ice cream freezer deployment. (A&P SAR 83Mln + SAR 221 Mln.)

• General & administrative expenses as % of sales remained marginally lower than last year as a result of controls.

• Finance income increased by SAR 21.8 Mln because of increase in deposit rates and higher cash generation.

• Finance costs are higher mainly due to final settlement of put option liability.

Commodity business (SADAFCO Poland/ Mlekoma Group):

As explained above the operational profitability of Poland has declined as a result of low SMP prices and additional impact of final settlement of put option by SAR 49.2 mln.

• Our investments in selling and distribution have fueled growth and market shares dominance continues with positive trending lines vs (last year) at: Milk 64.4% (61.5%), Tomato Paste 56.3% (53.9%) and Ice cream 31.4% (29.5%).

• We continue to delight our consumers through new offerings. Our innovations contribution to total sales was 7%. In this year launches in non-dairy alternatives were Coconut & Almond. In addition, in the culinary range Hummus, Tahini and Koshna were launched.

• SADAFCO aims to optimize operations to achieve faster growth in operational profit compared to gross profit, thereby enhancing net profit margins and simultaneously investing in S&D channels to drive growth and expand market presence.

We are positive that profitability of our Poland operations will improve in the new year as the unfavorable market conditions are gradually reversing. As a step to make Poland’s operations more efficient we have subsequent to year end sold a 49% owned subsidiary which did not contribute materially for SAR 1.2 Mln.

At the beginning of 2024 businesses have been impacted by two headwinds:

1. 51% hike in diesel prices would directly impact our distribution costs. As guidance we estimate that the diesel price increase would impact our results by low single digit percentage increase.

2. Red Sea blockade would also affect our costs adversely as sea transportation face delays and risks. Estimating value of additional costs at this stage is pre-mature as it would depend on the duration of the crisis. However, at this stage we are sufficiently stocked on imported finished goods and raw materials.

Civil work on new Yanbu Depot project (SAR 20 Mln) has commenced for completion this year.

We continue to generate positive cashflows. Our cash position (including short term investment) is SAR 1bln.

Shareholders’ equity at a healthy 1.901Bln vs 1.663 Bln on 31 Dec 2023 vs. last year.

Our focus on ESG continues with addition of first Electric ice cream truck. SADAFCO’s ENVIRONMENTAL Policy is available on our website.

The earnings per share is computed as follows:

Profit attributable to owners of SADAFCO SAR 327,619,000

Total shares 32,500,000

Treasury shares held by the Company 500,250

Total shares outstanding 31,999,750

EPS 10.24