The latest results for the last fiscal year just published demonstrate substantial improvements in profitability, reports Tanmiah Food Group. Furthermore, they indicate strong prospects for further expansion, the company says.
Based in Saudi Arabia, the company is a market leader in fresh and processed poultry and other meat products. It also supplies animal feed and health products, and operates a foods brand franchise.
For the 12 months ended December 31, 2022, it reports total revenue of 1.727 billion riyal (SAR; US$460.5 million). This equates to a year-on-year increase of almost 43%.
At SAR420.2 million, gross profit was more than 81% above the previous year’s figure. Expressed as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), operating profit was reported at SAR220.3 million, which compares with SAR90.85 million in the previous year.
From SAR13.6 million in the 2021 fiscal year, net profit attributable to the owners of the company jumped to SAR186.8 million for the 12 months just ended.
Commenting on the results, Tanmiah Food Company’s CEO Zulfiqar Hamadani attributed this success to a number of factors.
“This significant achievement is credited to continued operational excellence, the current operating environment that is conducive to growth, our ongoing capacity expansion, and the trust our customers have continued to place in us,” he said.
Among the company’s most significant business developments during 2022 highlighted by Hamadani was the completion of its strategic partnership with Tyson Foods.
As well as helping Tanmiah to consolidate its position as the leading poultry producer in the Middle East, the CEO said the agreement will offer plenty of opportunities to grow the group’s business in future. Not only will this generate value for shareholders, but it will also allow the firm both to innovate production, and increase efficiency.
Expansion in fresh poultry
In the year just ended, the company reports the cost of sales at SAR1.307 billion. An increase of almost 34% compared with 2021, the group attributes the rise in costs to the expansion in the firm’s production capacity and higher sales volumes.
Sales of fresh poultry meat accounted for around 85% of Tanmiah’s overall revenue. At SAR1.463 billion, revenue for this businesses was up 35.6% year-on-year. This helped to meet growing demand for poultry meat in the Kingdom, and to contribute to a gain in self-sufficiency in this market segment. Over the year, daily production capacity expanded from 370,000 birds to 456,000 by the end of December.
Development of Tanmiah’s other businesses
Increased demand for animal health products and equipment drove a near-80% growth in revenues for the company's feed and animal health business. Sales for the year just ended amounted to SAR234.5 million for this division, according to the annual report.
The Further Processed products business is operated by SFPC, in which Tyson Foods gained a 60% equity stake following the strategic partnership between the two companies. As a result, Tanmiah’s financial statements for 2022 present it as a discontinued operation for the group.
Revenues for the food franchise operation were reported at SAR29.6 million in the 2022 fiscal year. This is the first full year of the business.
With the opening of 16 POPEYES outlets in Saudi Arabia during 2022, Tanmiah ended the year with 20 of these stores.
More on Tanmiah Food Company
Since it was founded in 1962, Tanmiah Food Company has become one the leading suppliers of fresh poultry, processed poultry, and other processed meat products, as well as animal feed and health products in the Middle East. It is a publicly listed company on the Saudi Stock Exchange.
As of December 2022, vertically integrated production by Tanmiah includes 108 farms, six hatcheries, two feed mills, four slaughterhouses, and 13 dry and cold storage facilities. In addition to Saudi Arabia, it operates from premises in Bahrain and the United Arab Emirates (UAE). Its products are sold through a network of wholesalers, retailers, and food service outlets, as well as online directly to consumers.
Previously, it was announced that Tyson Foods and Tanmiah Food Company had entered into a strategic partnership. Under the arrangement, United States-based Tyson Foods invested in the Saudi Arabia-based company's subsidiaries. For Tyson, the agreement helped expand its international reach, while Tanmiah would gain more of the halal food market.
With the view to increasing poultry production in the Kingdom of Saudi Arabia, the Tanmiah Food Company signed an agreement last week to form a joint venture with MHP SE of Ukraine.
