Tanmiah H1 revenue surges to SAR983.1m on poultry sales

The food manufacturer’s half-year profit increased by 2.2 per cent to SAR32.4m from SAR31.7m a year earlier

by Gulf Business

August 14, 2023

Saudi Arabia’s Tanmiah Food Company posted SAR983.1m in half-year revenues, up 26.6 per cent year-on-year (YoY) from SAR776.7m a year ago, driven by continued growth across all segments, particularly fresh poultry sales.

Fresh poultry sales, which contributed 84 per cent to the company’s total revenues, increased by 22.2 per cent YoY in H1 2023 to SAR825.7m from SAR675.9m during the same period a year earlier.

Tanmiah, said in a statement, that the growth in revenues can be attributed to a continued rise in sales volumes as well as an increase in production capacity.

The company’s food franchise operations reported a significant increase in revenues from SAR9.8m to SAR37m.

“Our progress during the first half of the year speaks to our dedication to fortifying the domestic food sector and supporting Saudi Arabia’s journey towards becoming a global Halal hub,” said Ahmed bin Sharf Osilan, managing director and executive board member of Tanmiah.

The food manufacturing firm’s half-year profit increased by 2.2 per cent YoY to SAR32.4m compared to SAR 31.7m in H1 2022.

Cost of sales also increased by 26.8 per cent YoY to SAR757.2m in the first six months of the year from SAR597.1m for a similar period a year ago, as Tanmiah ramped up production and expanded its market reach.

The group’s earnings before interests, taxes, depreciation and amortisation (EBITDA) reached SAR119.2m in H1 2023 from SAR82m a year earlier, buoyed by the strong revenue performance, which outweighed the 12.7 per cent increase in operating costs.

Tanmiah ended the first half of the year with a cash position of SAR285m compared to SAR267.1m as of December 31, 2022. The company increased its capex from SAR41m in the first of 2022 to SAR71m in 1H2023.

“Planned capital expenditure in the next few years will focus on ramping up primary processing, feed milling and hatching capacities, in addition to the expansion of food franchise operations,” Tanmiah said in a statement.

Tanmiah’s growth strategy

Meanwhile, Saudi Arabia plans to invest $20bn by 2035 to boost the domestic food sector.

The kingdom’s Agricultural Development Fund approved a significant number of credit facilities worth more than SAR4.2bn in H1 2023 to reinforce the country’s food security goals while ensuring the stability of food supply chains, in addition to developing the domestic agricultural sector.

Tanmiah’s business model positions it for growth on local, regional and global fronts, underpinned by favourable market trends.

Last year, US meat company Tyson Foods agreed to invest $70m in Tanmiah in return for stakes in subsidiaries that operate chicken hatcheries, feed mills and poultry-processing plants serving in Saudi Arabia, Kuwait, Bahrain, the UAE, Oman, Lebanon and Jordan.

Tanmiah partnered with the Public Investment Fund’s Halal Products Development Company in June to strengthen and localise the halal products industry in Saudi Arabia while supporting its development within the Middle East region.

“Aligned with our commitment to supporting the kingdom’s food security objectives, this partnership underscores our dedication to both domestic and international impact in the Halal sector,” Osilan.

The global halal food market is expected to grow at an estimated CAGR of 10.8 per cent during 2023/28, according to industry reports.