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Mon 8 Jul 2019 10:09 AM

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Saudi Almarai shares plunge after 12% profit drop in Q2

CEO Alois Hofbauer resigned from the food giant after three months in the role

Saudi Almarai shares plunge after 12% profit drop in Q2
Almarai attributed the drop in profit to high expenses and financing costs

Shares of Saudi-based conglomerate Almarai plunged 2.5 percent in the morning after it reported a nearly 12 percent drop in its Q2 profit and changes in top management.

The company listed on the Tadawul stock exchange announced the resignation of its CEO Alois Hofbauer, who joined in April, due to personal reasons. He has been replaced by Georges Schorderet, a former chief executive and chief financial officer at Almarai. He was appointed as adviser to the board following his decision to retire this year.

It also appointed Majed Mazen Rasheed Nofal as deputy CEO, and promoted Paul Gay as CFO.

The food giant reported 582.5 million riyals ($155.46 million) in net profit in the quarter ended June 30, down from 661.41 million in same period last year.

It attributed the drop to high expenses and financing costs. However, revenue for the three-month period rose 2.6 per cent to 3.76 billion riyals thanks to strong poultry and fresh dairy sales, though sales of juice products remain slow.

Almarai said funding costs increased by 41.2m riyals due to “higher interest-bearing debt after repayment of perpetual sukuk last year, higher interest rate due to higher Sibor and lower capitalisation of funding cost for qualified capital projects,” according to its bourse statement.

The company in May approved a new five-year business plan that includes 7.1bn riyals in capital investments aimed at helping it cut costs and grow profit.

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