Tanmiah Food Company, a market-leading provider of fresh and processed poultry products, has seen its first-quarter (Q1) net profit attributable to owners of the firm vault 14 times from SR1.5 million to SR21 million ($5.6 million) 

 

Revenue increased 42.2% YoY to SR484.5 million in Q1 2023 driven by a 37.4% rise in fresh poultry sales, a testament to the rising popularity of Tanmiah’s products. 

 

As the Board recommends distribution of SR3.5 per share in cash dividends for FY2022, the company has continued the expansion of food franchise operations, with 26 outlets now operational across Saudi Arabia.

 

Gross margin

Gross margin substantially improved from 20.7% in Q1 2022 to 24.8%, while EBITDA of SR66.2 million (+164.8% YoY) yielded a margin of 13.7%. 

 

Zulfiqar Hamadani, CEO of Tanmiah, commented: “Tanmiah reported healthy financial indicators during the first quarter of 2023, with an improvement in revenues, as we are witnessing a sustained increase in sales volumes across our core business segments. Fresh poultry continued to drive the growth in revenues, while our food franchise operations are proving to be a success story, with revenues more than quadrupling when compared to last year. 

 

“Creating tangible value for our shareholders, customers, and broader stakeholder groups, is a top priority for us at Tanmiah, and we are delighted to be rolling out several strategic measures, that focus on growing our operations in a sustainable, profitable, and responsible manner. We continued to progress well in terms of achieving the objectives of our strategic partnership with Tyson Foods and are targeting to jointly invest in the expansion of the further processing capacity of SFPC to nearly 100,000 metric tonnes annually.

 

“As we remain agile and cater to our customers’ evolving needs and preferences, while enhancing the innovation and quality of our product offerings, we launched Tanmiah Life – a Halal and Saudi Made fresh poultry line with plant-based nutrition, enriched with Omega-3, which is the first of its kind in the Middle East.”

 

New projects

Ahmed Osilan, Managing Director of Tanmiah said: “In line with the efforts to accelerate growth further Tanmiah launched new projects as part of the company’s strategic plan for 2030. Several MoUs were signed with each of Agricultural Development Fund (ADF), Saudi Investment Recycling Company (SIRC), and National Center for Vegetation Cover Development and Combating Desertification (NCVC). 

 

“Tanmiah is looking to launch the “10miah farmers initiative” with ADF and will work together with SIRC to recycle poultry waste and reduce carbon emissions, in addition to collaborating with NCVC. Furthermore, an MoU was signed between Tanmiah’s subsidiary, Desert Hills for Veterinary Services and MHP, Europe’s leading producer of poultry meat, to establish and operate a number of poultry breeding facilities across the kingdom.

 

Meanwhile, Animal Feed and Health revenues grew by 49.2% YoY to SR61.5 million from SR41.3 million, driven by increased demand for animal health products and equipment. 

 

Food franchise operator revenues

Food franchise operator revenues significantly increased from SR4.0 to SR17.0 million in 1Q2023, marking the segment’s best performing quarter since the launch of the Company’s food franchise vertical in 2021. During the period, Tanmiah opened 6 POPEYES stores in the Kingdom, bringing the total to 26 operational outlets.

 

Cost of Sales increased 34.9% YoY to SR364.5 million in the first quarter, compared to SR270.2 million, due to the rise in sales volumes during 1Q2023. Gross profit increased significantly by 70.3% YoY to SR120.0 million, from SR70.4 million, in line with the continued rise in sales volumes and recovery in margins, as well as enhanced utilisation of assets and operational efficiencies.

 

Tanmiah ended the period with a cash position of SR232.8 million, compared to SR267.1 million as of December 31, 2022.

 

Total borrowings increased from SR308.4 million at the end of December 2022 to SR315.9 million. 

 

Capex increased from SR19.4 million in Q1 2022 to SR37.2 million in 1Q2023. Planned capital expenditure in the next few years will focus on ramping up feed milling and primary processing capacities, thus enabling the Company to seize new growth opportunities. 

 

Growth strategy 

By leveraging its fully integrated and highly efficient business model and capitalising on its extensive market expertise, Tanmiah is strongly positioned to unlock multiple growth avenues both domestically and overseas, in the rapidly expanding global Halal food market. 

 

With operational excellence at the core of everything it does, the company will drive innovation across the entire value chain and continue to explore emerging opportunities for diversifying its product and service offerings, across new geographies. 

 

Tanmiah is putting in place wide-ranging strategic and well targeted investments, which are expected to pave the way for long-term and sustainable growth in the years to come, in line with its commitment to the kingdom’s goals of ensuring food security and self-sufficiency.

 

Operating within a conducive business environment, largely supported by transformative government policies and solid underlying economic fundamentals, Tanmiah is expected to witness an accelerated pace of growth in the future.-- TradeArabia News Service