Middle East

Tanmiah Delivers Solid Revenue Growth Supported by Strong Product Demand

Riyadh — Tanmir Food Company (“Tanmiah” or “Company”, 2281 of the Saudi Exchange) is a market-leading provider of fresh and processed poultry and other meat products, animal feed and health products and a franchise operator of food brands. and announced its results today. Revenue for the first half ended 30 June 2022 increased by 31% year-on-year (YoY) to 965.9 million riyals. Gross margin improved to 23.3% from 22.8% in the first half of 2021, with EBITDA of SR107.5 million (+30% year-on-year) and margin of 11.1%. Net profit increased 43% year-on-year from SR22.2 million to SR31.7 million on the back of strong top-line performance and gradual price increases in the fresh poultry category.

Tanmiah CEO Zulfiqar Hamadani commented: Recent completion of Majuma facility renovation project to reach production capacity of 420,500 chickens per day (excluding rental capacity) further boosts earnings and profitability in coming quarters, reaching capacity of 1.2 It is a major milestone in the goal of By 2025 he will have 1 million birds per day.

Despite volatility in global commodity prices, our strong market positioning, and growing customer preference for a diversified product offering, allows us to mitigate this impact through prudent price management. As a result, profit margins improved during the period.

As we embark on a new phase of Tanmiah’s journey through a ground-breaking partnership with Tyson Foods, we will strengthen every step of our value chain, diversify our product offerings and expand globally to serve our shareholders. We expect to unlock substantial long-term value in footprint. Overall, we expect to continue to invest heavily in our business, further increasing our production capacity and gaining through the potential launch of a new global halal brand with Tyson that could be sold worldwide. Meet increased demand. ”

Tanmiah Executive Board Member and Managing Director Ahmed Osilan said: Continued investments to increase production capacity and strengthen long-term relationships with key business partners have paid off for strong performance during this period, successfully achieving significant profitable growth .

We are pleased to accelerate our pace of growth by taking our company to a whole new level by improving our technical expertise and opening up new opportunities to realize broad synergies across the Group. think.

Further supporting the company’s strategic growth plans is a 150 million riyal loan facility recently secured by its subsidiary ADC from the Agricultural Development Fund. It forms part of a comprehensive loan aligned with the government’s ongoing initiative to boost food production. We will bring world-class sector expertise to the Kingdom and enrich the domestic ecosystem by creating many job opportunities in the local market, thereby achieving Saudi Arabia’s food security and self-sufficiency goals. We continue to play a pioneering role in strengthening It is the result of a significant partnership with Tyson Foods. ”

Revenue analysis

Tanmiah reported first-half revenue of 965.9 million riyals, up 31% year-on-year from 734.9 million riyals. Top-line growth was driven by strong performances across all segments, particularly fresh poultry and further processed products, reflecting a combination of both price and volume effects.

Sales of fresh poultry, which accounted for 69% of total revenue, increased 31% to 666.2 million riyals from 510.7 million riyals in the same period last year. Fresh poultry revenue growth is sustained, driven by continued capacity expansion in line with the growing popularity of Tanmiah’s products and incremental price increases across the fresh poultry category. led to an increase in volume. The group will end 2021 with a daily production capacity of 370,000 birds, increased to 420,500 birds per day (net of rental capacity) following an upgrade of its Tanmiah facility in Majuma, north of Riyadh, It recorded a growth of 13.6%.

Revenue from further processed products reached SR199 million in the first half of 2022, up 31% year-on-year. The increase in sales was driven by increased demand from the food service channel and a phased revision of prices for key food service customers at contract renewals.

In the first half of 2022, feed and veterinary health revenue increased by 26% to 91 million riyals. This is primarily due to increased demand for veterinary drugs and equipment.

The food franchise operator’s revenue reached 9.8 million riyals in the first half of 2022, with the second quarter reflecting the second full quarter since the launch of the food franchise vertical. During this period, Tanmiah opened a total of 6 of his POPEYES® stores in his KSA, operating a total of 10 stores as of June 30, 2022.

Growth strategy

Tanmiah’s strategy to further strengthen its market position rests on both organic and inorganic growth. To seize lucrative opportunities from the growing demand for poultry, coupled with the Kingdom’s strategic goal of achieving 80% self-sufficiency in his poultry sector by 2025, Tanmiah will invest heavily in expanding its production capacity. and continues to make good progress in this regard. As a result of continued investment in its assets and operations, the company expects to increase local fresh chicken sales by 9% year-over-year, from 49.2 million chickens in the first half of 2021 to 53.5 million chickens in the first half of 2022. % increased. Tanmiah recently completed a renovation of its Majmah facility. This has increased his total production capacity from 370,000 birds per day at the end of 2021 to his 420,500 birds (net of rental capacity) per day.

Another important event for Tanmiah is a strategic partnership with Tyson Foods. Tanmiah sees this partnership as an important milestone in the company’s 60-year journey, demonstrating its commitment to a pioneering role in enhancing Saudi Arabia’s food security and self-sufficiency goals. This partnership will give Tanmiah access to global industry know-how and could lead to new opportunities in the burgeoning Halal market. Leveraging this important collaboration will enable Tanmiah to strengthen its product, customer and geographic diversification and deliver real value through operational process advancements. from now on.

Tanmiah continues to leverage other strategic initiatives by the government to strengthen the domestic food sector, which saw the company invest 1 from the Agricultural Development Fund (ADF) to finance grain imports. A short-term credit facility of SR 150 million was obtained. In addition, Tanmiah recently secured his €48.2 million long-term Shariah compliant facility from Rabobank to further support its expansion programme.

https://saudigazette.com.sa/article/623977/BUSINESS/Tanmiah-delivers-robust-earnings-growth-supported-by-strong-product-demand?ref=rss&format=simple&link=link Tanmiah Delivers Solid Revenue Growth Supported by Strong Product Demand

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