Strong sales of fresh poultry meat have driven higher quarterly revenue for Tanmiah Food Group of Saudi Arabia, while its fast-food franchise has also performed well.
Compared with the same period of last year, Tanmiah Food Group reports year-on-year increases of around 20% in sales revenue and gross profit for the first quarter (Q1) of the fiscal year.
Revenue for the three months of January-March 2024 was just over 581 million Saudi Arabian riyal (SAR; US$155 million). While sales were higher year-on-year across the business, the company reports particularly strong performance for fresh poultry.
As a result of sales expanding ahead of costs of production, the group achieved gross profit of over SAR144 million — up 20.4% from the same period of 2023. In spite of almost 26% higher sales, general and administrative costs (SG&A), operating profit was SAR39.5 million. This equates to a year-on-year increase of 8.5%.
Net profit to the group’s owners was unchanged from the comparative period at SAR21.0 million. This included a one-off subsidy of around SAR15.3 million, the report notes.
Compared with the previous quarter, a marginal increase in sales volume for the quarter just ended resulted in a 1% increase in revenue for the three months. SG&A costs increased by 0.4%. A 21% reduction in net profit to the group’s owners compared with the October-December quarter is attributed to a lower subsidy pay-out, as well as increased costs of diesel in Saudi Arabia.
Q1 business segment performance
Tanmiah Food Group comprises three divisions: fresh poultry, feed and animal health, and fast-food franchise Popeyes.
For Fresh Poultry, revenue for the first three months of 2024 was reported at more than SAR480 million. This represented a year-on-year increase of 18.3%, driven by higher production capacity, geographical expansion, and a focus on targeted marketing. As a result, this business accounted for 83% of Group revenue for the quarter.
Stronger demand for animal health products and devices drove a near-18% rise in revenues for Tanmiah’s feed and animal health division.
Compared with the first quarter of 2023, revenue for the food franchise operator business was up by 68% at SAR28.5 million. Over this period, the Group opened two more Popeyes outlets, bringing its total operations in the Kingdom of Saudi Arabia to 54.
More on Tanmiah Food Company
With annual chicken slaughterings approaching 122 million, Tanmiah Food Company is among the largest poultry producers in the Middle East, according to the WATTPoultry.com’s Top Poultry Companies survey.
For the 2023 financial year, Tanmiah Food Company reported a doubling in sales revenue, which the firm attributed to strong performance in fresh poultry sales and its food franchise.
According to the group’s web site, the company was founded in 1962 as the Agricultural Development Corporation. In 2021, its name was changed to Tanmiah Food Group.
A fully integrated poultry meat producer, it operates 126 farms, six hatcheries, two feed mills, and four slaughterhouses (as of December 31, 2023).
As well as its home market of Saudi Arabia, the Group sells poultry products in the United Arab Emirates, Bahrain, Oman, Jordan, and Kuwait.
