Riyadh – Mubasher: Almarai Co reported lower net profits in the first quarter of 2019 amid market challenges, Al Rajhi Capital said in a report on Wednesday.

The Saudi food and beverage firm posted a 2.58% year-on-year profit drop to SAR 336 million in Q1-19, as compared to Al-Rajhi’s estimate of SAR 346 million.

Almarai’s revenue growth and gross margins were negatively impacted by weakness in GCC markets, especially a retreat in juice business revenues and an increase in alfalfa costs, the report added.

However, revenues of the Gulf's largest dairy company grew 3.8% year-on-year to SAR 3,354 million in Q1-19, on the back of the 19.4% growth in poultry sector and the 6.1% increase in bakery sector, despite the decline in dairy and juice sector.

Al Rajhi Capital reiterated its ‘Neutral’ rating on Almarai’s stock with a target price of SAR 51 per share.