Almarai Company: Everything You Need to Know About Its Performance in the Saudi

Almarai Company's journey began in 1977 with an initiative from Prince Sultan bin Mohammed bin Saud Al Kabeer, who recognized early on the importance of developing the dairy industry in Saudi Arabia. At that time, reliance on imported products and simple local products was prevalent, with a lack of integrated production and distribution systems to meet the needs of rapid population growth. The company initially focused on building advanced dairy farms in the Al Kharj region, benefiting from the latest animal and feed production technologies available globally. Almarai's ambition was not limited to local production; it early on began developing a wide-ranging supply chain that included refrigerated transportation and industrial processing, allowing it to maintain product quality and expand its distribution network to various regions of the Kingdom.

During the 1980s and 1990s, the company gradually expanded its product offerings, adding milk, yogurt, and cheese, and later entered the juice and baked goods sectors through strategic acquisitions and partnerships. By the new millennium, Almarai invested heavily in building modern factories and adopting advanced quality management systems, enhancing its competitiveness in the Saudi and regional markets. The company did not limit its activities to the Kingdom but expanded its operations to neighboring Gulf countries such as the UAE, Bahrain, and Kuwait, becoming a leading regional brand.

In the last decade, Almarai continued to diversify its products to include poultry and eggs through its acquisition of the National Poultry Company, and launched renewable energy projects and smart farms. All these strategic transformations were supported by major investors, including the Saudi Public Investment Fund and Savola Group, providing it with a strong capital base for sustainable growth. Today, Almarai is a model for national companies that have successfully built an integrated production system combining agriculture, manufacturing, distribution, and marketing, with continuous adaptation to market changes and consumer demands.

The ownership structure of Almarai Company is one of the essential factors explaining the company's stability and its leading role in the Saudi market. Since its listing on Tadawul, the company has attracted the attention of major local and international investors, in addition to institutional contributions from prominent government bodies. The most notable of these shareholders is the Saudi Public Investment Fund, which holds a strategic stake in the company, providing it with investment and political support that enhances its ability to implement large projects and overcome economic crises. Additionally, the role of Savola Group, one of the largest investment groups in the Kingdom, which has maintained a significant stake for years before restructuring its ownership at the end of 2024 by distributing its shares to its shareholders.

This distribution of ownership means that Almarai's strategic decisions are made with the participation of a diverse group of stakeholders, enhancing transparency and governance. The presence of government shareholders allows the company to benefit from government policies aimed at supporting food security and localizing agricultural industries, giving it an advantage in obtaining agricultural land, financing facilities, and priority in developmental initiatives.

Moreover, this institutional support contributes to enhancing the confidence of individual and institutional investors in the company's long-term stability. Recent developments have shown that the company can navigate periods of economic volatility due to the strength of its financial position and the cohesion of its main shareholders. In the context of Saudi Vision 2030, Almarai is considered a key partner in achieving food security and industrial development goals, increasing its chances of receiving new government incentives and sustainable support programs that enhance its competitiveness.

Almarai Company is distinguished by its diverse products and services that cover a wide range of daily consumer needs in the Kingdom and Gulf countries. The company's production system begins with agriculture, where it owns large farms for natural fodder and corn, and manages the largest cattle farms in the region, ensuring a stable supply of raw milk. The operations then move to dairy and juice factories, which are among the most advanced in terms of technology and adhere to the highest standards of quality and food safety.

Almarai's product portfolio includes fresh and pasteurized milk, yogurt, cream, cheese, butter, as well as a wide variety of natural and flavored juices. The company has also expanded into the baked goods sector, offering products such as bread, pastries, croissants, cakes, and other ready-to-eat meals. In recent years, the company has added the poultry and egg sector, capturing significant market shares in this field after acquiring the National Poultry Company.

Almarai's services are not limited to production only; they also include logistics and refrigerated transportation, ensuring that products reach thousands of sales points daily. The company has the largest distribution network in the food sector in the Kingdom, covering almost all urban and rural areas. This integrated system reflects the company's ability to control quality and cost, and to meet consumer expectations quickly and effectively. Almarai has recently focused on developing healthy and natural products in response to changing consumer trends towards healthy foods and clean ingredients, enhancing its leading position in the market.

Recent financial results for Almarai Company during 2024 and 2025 show indicators of continued growth and financial stability despite challenging global economic conditions. The company recorded a net profit of approximately SAR 1.37 billion in the first half of 2025, compared to SAR 1.31 billion in the first half of 2024, with an annual growth rate of about 5%. Revenues in the same period rose to SAR 11.05 billion, achieving an annual increase of approximately 4.2%. This slight growth reflects the company's ability to pass on some of the rising operational costs to consumers through moderate price increases or enhanced operational efficiency.

On a quarterly basis, the results for the second quarter of 2025 showed a net profit of SAR 646.9 million, confirming the company's continued operational momentum. These figures come in the context of fierce competition in the local market, where Almarai has managed to maintain and expand its market share in some sub-sectors, such as juices and healthy foods. The price-to-earnings (P/E) ratio indicates a stable stock valuation in the range of 20-25 times, a balanced rate reflecting investors' confidence in the sustainability of the company's profits and moderate growth.

Regarding dividends, the company continued its policy of distributing a significant portion of profits to shareholders while maintaining sufficient operational reserves. These results confirm that Almarai is capable of facing fluctuations in raw material prices and rising global costs thanks to the flexibility of its business model and the diversity of its income sources, making it one of the few companies in the sector that achieves continuous profit growth even in challenging economic conditions.

Almarai Company's stock is among the heavyweight stocks in the Saudi financial market, reflecting the high level of trust the company enjoys among individual and institutional investors. During the period from 2024 to mid-2025, the stock price ranged between SAR 45 and SAR 48, reaching approximately SAR 48.26 per share in December 2024 according to Tadawul data. This level is relatively high within the food sector, placing Almarai among the top 20 Saudi companies in terms of market value.

Market value is calculated by multiplying the stock price by the number of outstanding shares, making it in the range of SAR 80-100 billion according to the latest estimates. This valuation reflects market confidence in the company's ability to achieve sustainable growth, in addition to stable dividend distributions. As for the price-to-earnings (P/E) ratio, the company recorded rates between 20 and 25 times, which are considered balanced rates for companies with relatively stable growth in mature markets.

The price of Almarai's stock is linked to several factors, including financial performance results, developments in the food sector, changes in raw material prices, and government support policies. Prices are also affected by investors' reactions to market news, such as the restructuring of major shareholders' ownership or the announcement of new expansion projects. Despite fluctuations in global markets at certain times, Almarai's stock has managed to maintain relative stability thanks to the strength of the company's financial fundamentals and the diversity of its products. The stock is considered one of the preferred options for investors seeking a balance between cash returns and long-term capital growth, especially in the essential consumer goods sector.

Almarai Company's dividend policy is characterized by continuity and stability, making it appreciated by a wide range of investors seeking fixed income alongside capital growth. Since its listing on the Saudi financial market, the company has maintained the distribution of a significant portion of its annual profits to shareholders, with the distribution ratio ranging between 70% and 90% of net profit in most recent years. In late 2024, Reuters reports and official financial data confirmed that Almarai continued to distribute dividends at a nearly constant rate, despite fluctuations in global markets and inflationary conditions.

Dividends are usually distributed in cash annually, with each shareholder receiving a share proportional to the number of shares they own. For example, if the net profit per share in 2024 was SAR 2 and SAR 1.5 was distributed per share, the cash yield would be approximately 3% at a stock price of SAR 48. This yield is attractive within the consumer goods sector, providing additional appeal to defensive-minded investors.

The company follows a balanced approach to dividend distribution, retaining a portion of profits as reserves to cover future expansions or face any emergency economic conditions. This balance between dividend distribution and investment in growth has contributed to enhancing the stability of the stock and making it a preferred option in long-term investment portfolios. Additionally, the regularity of distributions reflects the company's strong cash flows and its ability to achieve stable operating profits even during periods of economic volatility. This approach underscores the company's commitment to maximizing shareholder value without compromising growth and expansion requirements.

The food and beverage sector is one of the vital and strategic sectors in the Saudi economy, characterized by its direct link to the daily needs of the population. With a growing population and rising income levels, the demand for locally manufactured food products has increased, prompting many companies to invest in this field. In this context, Almarai Company has emerged as a key player, successfully building an integrated production and distribution system covering all stages of the value chain from agriculture to manufacturing and marketing.

Almarai benefits from its leading position in the sector through massive investments in fodder and dairy farms, dairy and juice factories, and a vast distribution network covering most regions of the Kingdom and Gulf countries. The company also invests in the latest food manufacturing technologies, ensuring the production of high-quality products that meet local and international standards. These investments have contributed to enhancing national food security and reducing the Kingdom's reliance on imports in the dairy, juice, and baked goods sectors.

Moreover, Almarai plays an important role in achieving the goals of Saudi Vision 2030 related to localizing food industry and increasing the private sector's contribution to GDP. The company provides thousands of direct and indirect jobs and supports local supply chains through partnerships with Saudi suppliers and farmers. Almarai also keeps pace with modern trends in the sector, such as developing healthy and sustainable products and utilizing smart agriculture and renewable energy technologies. All these factors enhance Almarai's position as a leading company in the food and beverage sector and give it a competitive advantage that is difficult for competitors to match.

Almarai Company faces strong competition in the Saudi food sector, despite its clear advantages in many categories. The most notable local competitor is the National Agricultural Development Company (Nadec), which is the second-largest producer of dairy and juice in the Kingdom. Nadec has a wide production and distribution system and competes with Almarai in milk, yogurt, and juice products, also benefiting from similar government support. In the baked goods and juice category, there are local companies like Maali, in addition to smaller regional companies focusing on specialized sectors.

On the international front, companies like Nestlé and Danone are present in the Saudi market through agents and distributors, especially in children's products and healthy foods. Although competition with these companies is less direct in the fresh dairy sector, it does affect some high-value-added sub-sectors. In the poultry and egg sector, the National Poultry Company was a strong competitor before being acquired by Almarai and integrated into its operations.

Almarai distinguishes itself from most competitors by owning an integrated supply chain from agriculture to distribution, giving it flexibility in controlling costs and maintaining product quality. Additionally, the widespread presence of its brand and the strength of its logistics network make it difficult for competitors to catch up in market share. Competition continues to drive the sector towards innovation and quality improvement, but Almarai remains at the forefront due to its ongoing investments and extensive experience in managing large supply chains.

Almarai Company has witnessed several administrative and investment developments during 2024 and 2025 that have strengthened its position in the market. Among the most notable developments is the restructuring of Savola Group's ownership, where the group announced the distribution of its stake (34.52%) in Almarai directly to its shareholders, a move aimed at increasing transparency and enhancing individual investor ownership. The market reacted positively to this measure, with Savola's shares rising while Almarai's shares remained stable, reflecting investors' confidence in the company's stability regardless of changes in institutional ownership.

On the investment front, the company continued to inject significant investments into developing production facilities, expanding renewable energy, and adopting smart agriculture technologies. For example, Almarai announced the completion of projects to expand solar power stations at some of its farms, aiming to reduce energy costs and minimize its carbon footprint. The company also launched new production lines in the juice and healthy food sectors in response to changing demand and consumer trends towards natural products.

Administratively, the company continued to implement competency development programs and enhance governance, focusing on compliance with environmental and social standards (ESG). This has been reflected in the improvement of the company's rating by environmental and social rating agencies. The recent period has also seen a focus on supporting internal innovation and developing new products that meet the needs of diverse age groups. These developments confirm Almarai's ability to adapt to market and regulatory transformations and support its continued leadership in the Saudi food sector.

Almarai Company places great importance on sustainability and social responsibility, being one of the leading Saudi companies in integrating environmental, social, and governance (ESG) standards into its operational strategies. In recent years, the company has invested significantly in renewable energy projects, such as expanding solar power stations to operate some of its production facilities, aiming to reduce reliance on traditional energy sources and lower carbon emissions.

In terms of water management, Almarai works to improve water use efficiency in farms and factories by applying smart irrigation techniques and recycling water in industrial processes. These initiatives contribute to reducing the environmental impact of agricultural and industrial operations and align with the Kingdom's trends towards protecting natural resources.

In the realm of social responsibility, the company is committed to supporting local communities by providing job opportunities and training, and developing support programs for local farmers and suppliers. It also participates in healthy food awareness campaigns and supports charitable initiatives related to food security and public health. All these efforts enhance the company's image as a sustainable and reliable partner in achieving national development goals and increase its attractiveness to investors who are increasingly attentive to sustainability standards in their investment decisions.

Almarai Company plays a pivotal role in achieving the goals of Saudi Vision 2030, particularly in food security, localizing industry, and developing local supply chains. Through its massive investments in fodder and dairy farms, production factories, and distribution networks, the company contributes to reducing reliance on imports and providing high-quality products that meet local market needs.

The company supports government efforts to increase localization in the food sector, providing thousands of job opportunities for Saudis at various operational levels, from agriculture to manufacturing and management. Almarai also participates in training and qualifying national cadres, enhancing workforce efficiency and contributing to the transfer of knowledge and experience to the new generation of Saudi professionals.

In terms of sustainability, the company's initiatives in renewable energy and resource efficiency align with Vision 2030 goals of reducing emissions and achieving environmental sustainability. Additionally, the expansion into healthy and natural products aligns with the vision's trends to enhance public health and quality of life. Furthermore, the company's support for local farmers and suppliers through strategic partnership programs enhances the integration of national supply chains and raises the level of food self-sufficiency in the Kingdom.

Despite the strong performance and relative stability enjoyed by Almarai Company, it faces a range of challenges and risks that could impact its future results. Among the most prominent challenges are rising raw material costs, particularly animal feed and energy, which are subject to fluctuations in global prices. Changes in government policies, such as support for agriculture or the imposition of new fees on certain inputs, can also affect production costs and profit margins.

There are also risks related to changes in consumer behavior, such as the shift towards healthy foods or plant-based alternatives, requiring the company to continuously develop new products to meet this changing demand. Local and international competition poses a constant threat, especially in sub-sectors that are easy for smaller companies or global brands to enter.

The company also faces regulatory and financial risks, including fluctuations in foreign exchange rates due to regional expansion and compliance with increasing environmental and social standards. Finally, unexpected global events, such as pandemics or geopolitical crises, can affect supply chains and consumer demand. However, the strength of Almarai's financial position, the diversity of its products, and the flexibility of its operational management mitigate these risks and provide it with greater adaptability to emerging developments.

Almarai Company has promising growth prospects in the medium and long term, thanks to its strategic plans for geographic and product expansion. Geographically, the company focuses on enhancing its market share in Gulf markets, such as the UAE, Kuwait, and Qatar, while exploring opportunities to enter new markets in the Middle East and North Africa. This expansion serves as a key driver for revenue growth and distribution of risks associated with the local economy.

On the product level, the company seeks to diversify its portfolio by developing new products in the categories of healthy foods and natural ingredients, responding to changing consumer trends. It also invests in smart agriculture and renewable energy technologies to improve production efficiency and reduce operational costs. This includes utilizing big data to enhance farm management and adopting AI solutions to analyze demand and optimize supply chains.

Almarai is also increasingly focused on internal innovation through product development laboratories and partnerships with universities and research centers. The company aims to continue offering products that meet the needs of diverse age groups and strengthen its position as a trusted and value-added brand. This integrated strategy enables the company to maintain its market leadership and keep pace with changes in the economic and technological environment.

Almarai Company's financial indicators reflect its operational strength and stability, as the company has maintained moderate annual growth in revenues and profits in recent years. The company's net profit in the first half of 2025 was approximately SAR 1.37 billion, compared to SAR 1.31 billion in the first half of 2024, representing a growth of 5%. Revenues rose to SAR 11.05 billion during the same period, an increase of 4.2% from the previous year.

The price-to-earnings (P/E) ratio has ranged between 20 and 25 times during 2024-2025, a rate that reflects stable cash flows and profit stability. The cash yield per share is approximately 2-3%, according to the annual distribution policy that has ranged between 70% and 90% of net profit. Operating margin levels indicate high efficiency in cost management, as the company has been able to pass on part of the rising costs to consumers while maintaining product quality.

On the other hand, the company maintains relatively low levels of debt compared to its asset and revenue size, enhancing its financial flexibility. Liquidity and solvency ratios demonstrate the company's ability to meet its operational and investment obligations without the need for significant external financing. All these indicators confirm the strength of Almarai's financial position and support its ability to continue growing and distributing dividends regularly to shareholders.