A 25.8% increase in sales achieved though continuous focus on sales efficiency, route optimization and channel profitability. The quarter witnessed a normalization in sales and profitability of Mlekoma as commodity prices declined in line with the global trend.

Gross margin of 30 % maintained vs 30.8% same quarter last year inspite of substantial decline in Mlekoma’s profitability compared to same quarter last year.

Selling & Distribution expenses are 14.2% of sales vs 14.1% in the Q3 last year. In value terms increased 26.8% in line with sales growth of 25.8%, reflecting increase in advertising and sales activities (in preparation for Ramadan sales) and manpower expenses to achieve operational excellence.

General & Administration are 4.2 % of sales which are lower vs 5.3% in the same quarter last year as result of expense saving initiatives.

Finance income increased substantially by SAR 2.9 Mln due to higher returns on investments in Murabaha deposits. Term deposits (more than 3 months) have also been placed to benefit from higher returns.

Finance cost is positive due to strengthening of Polish Zloty vs SAR compared to last quarter. As a result of reduction in profitability of Mlekoma there is no increase in Put Option liability during the quarter. Put Option liability has been fully accounted for as it concludes on 31 December 2022.

Lower sales attributable to business seasonality; like the back-to-school activities in the previous quarter; low ice cream season owing to winter and normalization of Mlekoma’s sales driven by lower commodity prices.

Healthy Gross margin of 30% was maintained despite lower sales of high margin ice cream and Mlekoma’s profitability decline. The marginal decline due to seasonal factors was partially offset by lower cost of sales (driven by lower commodity prices).

Selling & Distribution expenses representing 14.2 % of net sales vs 11.5 % in the previous quarter are higher due to advertising and sales promotion in preparation for more active Q4 (Ramadan), participation in Riyadh Season.

General & Administration expenses remained at 4.2% of net sales

In comparison to last quarter there was no Put Option liability charge as profitability of Mlekoma returned to normal levels.

Finance income was higher due to higher deposit rates.

Sales higher by 28.4% in SAR terms by 437 Mln across all categories and channels.

Gross margin of 31.4% vs 30.6% reflects increased focus on prudent buying strategies, efficiency in manufacturing operations and focus on profitable growth.

Selling & distribution expenses reduced to 12.8% vs 14.7% LY as % of sales, while increased by 12% vs. the same period last year.

General & administration expenses reduced to 4.5% vs 5.5% LY as % of sales, while increased by 5.4% vs. the same period last year.

Finance income of SAR 10.9 Mln represent significant increase over L/Y due to higher Murabaha deposit returns.

Finance costs represent primarily Put Option Liability.

We remain vigilant in managing the inflationary pressures in the global markets. Our financial position has enabled us to take advantage of the deflationary trend in the commodity market to manage higher profitability in the coming quarters

We continue to delight our consumers through new offerings in the dairy & ice cream category. New two SKU’s were launched in dairy (vanilla flavoured) during the quarter.

Work on Makkah Depot project of SAR 27 Mln is in progress and is expected to be operational in Q1 of next financial year.

We invested SAR 39 Mln in a Sukuk (classified as long-term Investment) which in addition to a high rate of return would result in Zakat expense savings.

We continue to generate positive cashflows. Our cash position is SAR 634 Mln (including short term investments of SAR 258 Mln i.e., Murabaha deposits more than 3 months)

During the quarter the Board approved distribution of interim dividend of SAR 3/share for payment in January 2023.

Shareholders’ equity at a healthy 1.663Bln vs 1.540Bln on 31 March 2022.

The earnings per share is computed as follows:

Profit attributable to owners of SADAFCO SAR 218,328,000

Total shares 32,500,000

Treasury shares held by the Company 500,250.

Total shares outstanding 31,999,750

EPS 6.82