For the third quarter of the fiscal year, Saudi Arabia-based Tanmiah Food Group is reporting rising costs. However, these have been amply covered by increased sales, which have led to a more than seven-fold jump in net profit compared with last year.
For the three months to September 30, Tanmiah has reported total revenue of 559.5 million riyal (SAR; US$149.2 million). This represents a year-on-year increase of just under 44%, according to Zawya.
The rise in revenue fed through to raise gross profit by 67% to SAR141.9 million, while net profit jumped to SAR31.7 million from SAR3.7 million last year.
Meanwhile, Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) rose by 120% year-on-year to SAR78.4 million.
Group CEO Zulfiqar Hamadani attributed this strong performance to Tanmiah’s sustained capacity expansion and capability to respond to the changes in consumer demands, as well as favorable market conditions. As a consequence of the Saudi Arabian government’s policies to promote domestic food production, the firm has received some protection from the turbulence in global commodity prices, according to Hamadani.
These positive developments in Tanmiah’s results for the third quarter have also helped to boost the fiscal results for the year so far.
For the nine months to the end of September, the group achieved a 36% year-on-year increase in revenue to SAR1.525 billion. At almost SAR186 million, EBITDA was 61% higher than at the same point in 2021. Meanwhile, net profit rose by 145% to SAR63.5 million.
Developing the group’s business
According to the Zawya report, Tanmiah Food Company has stated it is on track to achieve its plans for growth. Among its strategies are expansion in production capacity for both fresh poultry and further processed products, as well as the development of innovative new products and services.
Earlier this year, Tyson Foods and the Tanmiah Food Company entered into a strategic partnership, in which the United States-based Tyson Foods will invest in subsidiaries of the Saudi Arabia-based company. According to the partners, the agreement will help Tyson expand its international reach, and help Tanmiah to “unlock” the potential of the halal food market.
“With the recent completion of our landmark deal with Tyson Foods, we look forward to beginning the next exciting chapter in Tanmiah’s story,” said the group’s CEO Zulfiqar Hamadani. “This strategic partnership will not only open doors to many future growth opportunities and create significant value for all stakeholders, but will also further solidify our leadership in the market by promoting substantial improvements in scale, geographical presence, and operating efficiencies, as well as provide us with access to advanced and innovative production techniques.”
“Our entry into the global Halal market, by attracting global investments to the Kingdom, will enable the transfer of knowledge, localize jobs and local content, and contribute to enhancing the sector’s competitiveness, and the competitive advantages of local products, that are “Halal and Saudi Made” for export of our products, capturing opportunities in growing global halal market,” commented Ahmed Osilan, Executive Board Member & Managing Director of Tanmiah. “This will contribute to our sustainability goals and maximize profit for shareholders, whilst providing the highest level of quality for customers and consumers.”
According to Osilan, the group’s ambitious goals are reflected in its recent rapid growth. It aims to lead in the promotion of Saudi Arabian food security and self-sufficiency. Furthermore, it will be implementing a range of best practice in production and sustainability in line with the policies of the nation’s agriculture ministry.
More on Tanmiah Food Group
From its roots in 1962, Tanmiah Food Group has expanded steadily to its present workforce of 2,500 at 20 locations in seven countries.
Among the operations listed on the company’s website is the Agricultural Development Company Ltd. One of the largest producers of fresh poultry in the Gulf Cooperation Council (GCC), it operates 102 farms, and sells products under the Tanmiah brand.
Through a subsidiary in the United Arab Emirates as well as two facilities in Saudi Arabia, the group’s Supreme Foods Processing Company produces a range of value-added and cooked meats.
As a vertically integrated company, the Group produces and distributes animal feed, day-old broiler chicks and hatching broiler eggs, as well as selling animal health products, equipment and technology across Saudi Arabia through its Desert Hills for Veterinary Services Company Ltd. As well as six hatcheries and four slaughterhouses, the Group also operates two feed mills.
Last but not least, Tanmiah operates in the quick-service restaurant (QSR) segment since signing a master franchise and development agreement with POPEYES® for Saudi Arabia.
Over recent years, Saudi Arabia has successfully increased its rate of self-sufficiency in poultry meat production. This has been attributed, at least in part, to on-going support offered to the poultry industry by the government of the Kingdom.
