SAUDI ARABIA – Tanmiah, a producer and supplier of poultry and other meat products, has reported a 1277% increase in net profits for the 2022 financial year as a one-off gain from a partnership with Tyson Foods had an outsized impact on the company’s balance sheet.
The net profit which amounted to US$40.8 million include a one-off gain amounting to SAR 101.9 million (US$27.17M) from the strategic partnership with Tyson Foods.
This landmark partnership between the company and Tyson Foods is expected to propel growth and generate significant short and long-term returns.
“Our strategic partnership marks a significant milestone in Tanmiah’s journey and demonstrates our commitment to growth and supporting Saudi Arabia’s food security objectives,” said Zulfiqar Hamadani, Tanmiah’s CEO.
Through the agreement, Tyson Foods acquired a 15% equity stake in Agriculture Development Company (ADC), Tanmiah’s subsidiary, and a 60% equity stake in Supreme Foods Processing Company.
Supreme Foods produces a variety of value-added and cooked chicken and beef products with a distribution network spread throughout the Middle East.
As part of the agreement, Tyson Foods and Tanmiah committed to investing to expand the processing capacities of Supreme Foods.
The investment aligned with Tanmiah’s strategic expansion agenda and was intended to double the company’s production capacity in further processed products.
Tanmiah’s operating profit amounted to SAR 113.6 million (US$30.29M) for FY22, compared to SAR10.3 million (US$2.75M) in the year 2021, a growth of 995.9%.
The total Share Holder’s equity also increased by 86% to SAR662.6 million in 2022, from SAR356.2 million (US$94.97M) in 2021.
The growth of net profit is attributed to the 42.8% increase in generated revenue to SAR1,727 million (US$460M), driven by the sale of fresh poultry, together with the continued rise in sales across the company’s diversified product portfolio.
Fresh Poultry sales, contributing 85% to the company’s revenue, increased by 35.6% to SAR1,462.9 million (389.8M) in FY22.
The segment’s positive performance was supported by Tanmiah’s expansion of production capacity, which corresponds with the rapidly growing local consumer demand for fresh poultry.
The cost of sales increased by 33.7% to SAR1,306.9 million (US$427.6M), a result of the rise in sales volumes in FY22.
The gross profit also significantly increased by 81.3% in FY22 to SAR420.2 million (US$112M), driven by a continued recovery in margins, enhanced utilisation of assets, and improved operational efficiencies.
Tanmiah remains on track to achieving the goals of its strategic growth agenda focusing on the expansion of the company’s fresh poultry production capacity.
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