Riyadh – Mubasher: Aljazira Capital has maintained its “neutral” recommendation on Almarai Co’s stock with a revised target price of SAR 53 a share.

During the first quarter of 2019, Almarai’s net profits slid 2.58% year-on-year to SAR 336 million, with earnings per share (EPS) of SAR 0.34, compared to the research firm’s estimate of SAR 351.3 million, according to a report released on Sunday.

The year-on-year net profit retreat of the food and beverage firm was ascribed to higher-than-expected cost of goods sold (COGS) as well as an increase in finance expenses by SAR 28 million on the back of higher interest-bearing debt after repaying perpetual sukuk in 2018 and higher SAIBOR rate, the Saudi brokerage services company said.

Almarai’s total profit margin shrank by 275 basis points (bps) year-on-year to 36.06% in Q1-19 from 38.81%, pressured by higher alfalfa and material costs.