| Element |
Explaination |
| Reasons of increase (decrease) for quarter compared with same quarter last year |
The reason for the decrease in Net Profit for the 4th quarter compared to the same quarter last year was mainly due to: adverse valuation of inventory at end of period; increase in sales overheads resulting from advertising & visibility of new innovation (Laban, Laban Twist & Arabic Coffee); reconciliation of outstanding balances of rebates and trade receivable; hiring of new sales staff. |
| Reasons of increase (decrease) for period compared with same period last year |
The reason for decrease in Net Profit for the twelve months compared to the same period last year despite the sales growth was mainly due to: adverse valuation of inventory at end of period; increase in sales overheads resulting from advertising & visibility expense of new innovation (Laban, Laban Twist & Arabic Coffee); reconciliation of outstanding balances of rebates and trade receivable; hiring of new sales staff and introduction of new allowances to retain saudi nationals. |
| Reasons of increase (decrease) for quarter compared with previous quarter |
The reason for decrease in Net Profit for the 4th quarter compared to the previous quarter was mainly due to: adverse valuation of inventory at end of period; increase in sales overheads resulting from reconciliation of outstanding balances of rebates and trade receivable; hiring of new sales staff. |
| Other notes |
During 2014/15 we focused on getting back to double digit growth. These efforts supported by strong Sales and Media spent (1) resulted in a robust sales growth of 15%. We had to (catch up) on purchasing raw materials (stock replacement and replenishment of milk powder) at a time when the cost prices spiked thus starting the year at higher cost levels, had an adverse impact on inventory revaluation and higher storage costs (Q3/Q4) for the year (2) However, towards Q4 the benefit from lower cost of materials resulted in improved gross margin from 28% (Q3) to 34% (Q4) as it was mentioned in Q3 announcement. In order to ensure future growth, we expedited (3) the earlier, delayed 2013/14 as originally planned introductions of innovations (Laban, Laban Twist and Arabic Coffee). Consumer demand picked up satisfactorily in 2014/2015 and remains strong. SADAFCO has sufficient capacity to service increasing consumer demand this combined with convenient raw material stock levels at attractive cost will enable us to deliver higher net income next year, thereby further increasing shareholders value. |
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