Saudia Dairy and Foodstuff Company (Sadafco), a leading dairy and foodstuff producer, has reported a net profit of SR75 million ($20 million) in the second quarter of 2017, in comparison to SR81 million ($21.6 million) in the previous quarter of this year.

The company also recorded sales of SR 441 million ($117.5 million) during the second quarter, compared to SR453 million ($120.7 million) in the first quarter of this year.

Despite the drop in overall consumption levels, Sadafco achieved consistent net margins in the second quarter of 2017 in line with the previous quarters of this year and last year, said a statement from the company.
 
The material input costs continued to move up during the quarter as against previous periods and with the market witnessing sustained decline in consumption pattern, the combined effect impacted the top and bottom lines in absolute terms, it said.

Wout Matthijs, chief executive officer, Sadafco, said: “It is challenging to attain sustained margin levels in a period of muted consumption and stagnant market conditions.”

“The additional price pressure from the surplus supply levels on the fresh milk side has contributed to top line squeeze, albeit, to a negligible extent,” he said.

“On the cost part, the global material input costs have continued their ascent, the effect of which we managed to balance through prudent scaling down on the other costs, while not compromising on our high quality standards,” he added.

Matthijs added that the company continued to maintain strong working capital ratios, revealing a healthy cash balance of SR526 million ($140.26) with zero leveraging.

He further added that the shareholder equity year-o-year (YOY) grew by 14.8 per cent, from SR1.283 billion ($342.11 million) in the second quarter of this year, compared to SR1.119 billion ($298.38 million) from the same period last year.

“We will continue our strong focus on improving internal efficiencies combined with seeking growth avenues that can benefit us in the long run, thereby creating more opportunities to enhance shareholders value,” Matthijs concluded. – TradeArabia News Service