Tanmiah H1 revenue surges 27.6% to $195.7mln

Tanmiah Food Company, a leading provider of fresh meat and health products in Saudi Arabia, said that its revenues during the first half (H1) of 2021 grew by 27.6% to reach of SR734.9 million ($195.7 million) from SR575.8 million in H1 2020.

This increase in revenue is a result mainly of continued growth in both the fresh poultry and further processing segments of the business amid a resurgence in consumer spending as pandemic restrictions have eased.

Continued strong demand for fresh and domestically produced chicken meat along with increased capacity of the company is expected to support top-line performance of the company in the second half of 2021.

While the second quarter revenue was SR366.5 million, gross profit value in first half 2021 rose by 20.2% year-on-year to SR167.5 million, while net income was SR22.2 million, with a decrease of 16.2% attributable mainly to an increase in the global grain prices, a company statement said.

Zulfiqar Hamadani CEO of Tanmiah commented: Following the success of our recent IPO and the clear vote of confidence investors have placed in Tanmiah, our strong revenue growth in 2021 positions the business for an ambitious expansion. Combined with a planned rapid ramp-up in spending on production, distribution and brand assets, our integrated and efficient business model will enable us to increase capacity to take full advantage of the growing market demand in our defensive sector.

According to a recent market study, Tanmiah Food Company increased its retail market (volume) share from 16.3% to 19.6% in Moving Annual Total (MAT) June'2021 compared to the same period last year in Saudi Fresh Chicken Category.

Our business segments have continued to provide significant revenue growth driven mainly by a strong performance in the farming and further processing segments. Our cost management initiatives have continued to bear fruit, even as we have strategically increased spending on selling and distribution, and general and administrative items, said a spokesperson of Tanmiah said.

While margins have been impacted in the short term by much higher grain costs, we are confident in our business model going forward as we prepare to undertake major capital expenditure. The Companys balance sheet has strengthened further and is poised to support the ambitious expansion plan that we have set for the coming years, which will support food security and self-sufficiency in the region.

Growth strategy

The company plans to further expand its capacity to serve growing local and regional demand. Planned capital expenditure in the next five years to increase feed milling, primary processing and further processing capacities is intended to allow the Company to capture new and emerging growth opportunities.

The companys capital investments are expected to lead to higher revenues and margins due to the premium that end consumers are willing to pay for fresh domestically produced chicken meat. TradeArabia News Service