July 7 (Bloomberg) -- Almarai Co., the Saudi food producer operating a joint venture with PepsiCo Inc., posted a 5 percent increase in second-quarter profit as its dairy, juice and bakery business grew.
Net income rose to 398 million riyals ($106 million) from 380 million riyals a year earlier, the company said in a statement to the Saudi stock exchange website today. That was less than the 404 million-riyal average estimate of nine analysts compiled by Bloomberg.
Almarai, Saudi Arabia’s largest food producer, said in April it raised 1.3 billion riyals ($347 million) from the private placement of Islamic bonds with investors in the kingdom. The sale was part of a 2.3 billion-riyal sukuk program it set up last year. Almarai has a 15.7 billion-riyal, five-year investment program to boost output and develop products.
Chief Financial Officer Paul-Louis Gay said in May the company is considering tapping global debt markets in the next 12 months for about $500 million as it seeks to expand its business in the U.S., Argentina and Ukraine. The debt may be an Islamic bond or a hybrid sukuk, he said.
Sales are expected to be “driven by the growth of poultry, fruit juice and bakery segments,” Riyad Capital said in a research report dated July 2. “We continue to believe 2013 to be the year of poultry.”
The shares have increased 14 percent this year compared with an advance of 13 percent for Saudi Arabia’s benchmark index. The stock rose 0.7 percent to 72.25 riyals, the highest on a closing basis since February 2006, at 12:04 p.m. in Riyadh.
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