Almarai Quarterly Profit Rises 0.6% to 285.5 Million Riyals
Almarai Co. (ALMARAI), Saudi Arabia’s largest food producer by market value, posted a 0.6 percent increase in fourth-quarter profit, excluding the effect of a decline in the value of its investment in Saudi Zain.
Net income rose to 285.5 million riyals ($76 million) from 283.8 million riyals in the year-ago period, the Riyadh-based food maker said in a statement to the Saudi bourse today. The mean estimate of seven analysts was for a profit of 199 million riyals, according to data compiled by Bloomberg.
“We are bit disappointed with the numbers announced,” Asim Bukhtiar, an equity analyst at Riyad Capital, said in a phone interview today. “When considering the planned impairment charge on Zain, the results appear worse. Almarai plans to book the impairment charge in the final consolidated 2011 results, possibly as it finalizes the magnitude of the impairment.”
Almarai shares fell 0.5 percent yesterday to 99.5 riyals, valuing the company at 22.9 billion riyals.
Almarai may book an impairment of 136.7 million riyals on its investments in Zain Saudi, Chief Financial Officer Paul- Louis Gay said in October. The original value of Almarai’s investment was about 270 million riyals to 280 million riyals, and the impairment represents about 40 percent of that, he said.
Kingdom Holding Co. (KINGDOM), controlled by Saudi billionaire Prince Alwaleed and Bahrain Telecom Co. (BATELCO) abandoned in September a plan to buy 25 percent in Zain Saudi for $950 million from Kuwait’s Zain Group. The deal fell through because lenders refused to transfer debt guarantees from Zain to purchasers, Al Watan newspaper reported on Oct. 4, citing Zain Saudi’s Chairman Prince Hussam al-Saud.
Almarai bought Zain Saudi shares for 10 riyals a share. The stock closed at 5.7 riyals a share yesterday.
Almarai’s fourth quarter sales increased 16 percent to 2.1 billion riyals, compared with the same period last year, according to the company’s statement.
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