Nadec Agricultural Company: Comprehensive Financial Performance Overview

The National Agricultural Development Company (Nadec) was established in 1981 as one of the first companies to combine investments from both the public and private sectors in the Kingdom of Saudi Arabia. The establishment of Nadec was in response to the Saudi government's vision to enhance food security and support the national agricultural sector. Since its inception, the company has focused on developing an integrated chain of agriculture and food production, successfully expanding its activities to include the production of milk and its derivatives, juices, poultry, vegetables, and olive oil. Nadec's close association with state support programs for agriculture has enabled it to benefit from a strong infrastructure, including owning vast agricultural lands and advanced food manufacturing plants. Over the decades, the company has witnessed significant growth in its investment size, making it one of the largest listed companies in the food and beverage sector on the Saudi Tadawul market. Its establishment is considered a model for public-private partnerships, reflected in the diversity of its ownership between the Saudi government and private sector investors and financial institutions.

Nadec Agricultural Company relies on an integrated operational structure comprising several production sectors. At the forefront of these sectors is the dairy sector, which represents the largest share of the company's revenues, including the production of fresh and pasteurized milk, yogurt, cheese, and cream. In recent years, Nadec has expanded into producing natural juices in various flavors to meet the growing demand for healthy beverages. Additionally, the company manages greenhouse farms and open farms for producing fresh vegetables and fruits, with an increasing focus on olive cultivation and the production of high-quality olive oil. The company's portfolio also includes secondary products such as eggs, poultry, and some canned food items. This diversity enhances Nadec's ability to withstand market fluctuations and capitalize on the rising local demand for fresh and processed foods. The company continuously invests in production and packaging lines, placing particular importance on innovation in organic and additive-free products.

Nadec Agricultural Company witnessed balanced financial performance during 2024 and early 2025, with notable revenue growth accompanied by pressure on net profits due to rising operational costs. The stock price at the end of 2024 was approximately 21.42 SAR, gradually declining to around 20.56 SAR in November 2024. The market capitalization exceeded 13 billion SAR, with the number of outstanding shares stabilizing around 620 million shares. In the fourth quarter of 2024, the company achieved revenues estimated between 1.1–1.2 billion SAR, reflecting an annual increase of nearly 10% compared to the same quarter of the previous year. Despite this growth, net profit declined to approximately 45–55 million SAR, representing a decrease of about 15%, primarily due to rising production costs and prices of feed and energy. For the year, annual revenue growth was around 10–12%, while net profits decreased by 10–15%. These indicators reflect the company's continued strong sales amid challenges related to costs and market fluctuations.

The price-to-earnings (P/E) ratio is an important financial indicator used by investors to evaluate a stock. For Nadec, the P/E ratio ranges between 12 and 16 times, reflecting the stock's valuation in line with the averages of the food sector in the Kingdom. This figure indicates that investors are paying approximately 14–16 SAR for every SAR of the company's annual earnings. The dividend yield has stabilized between 3% and 5% in recent years. For example, if the annual dividend distribution is 1 SAR per share, and the stock price is 21 SAR, the yield would be around 4.8%. Nadec's management is committed to a stable dividend distribution policy, which enhances investor confidence and reflects the strength of its cash flows. However, the annual yield ratio is affected by fluctuations in the stock price and market conditions, highlighting the importance of monitoring official quarterly and annual financial data.

Nadec operates within the food and beverage sector, one of the most dynamic and growing sectors in the Saudi stock market. This sector is witnessing increasing demand for locally manufactured food products, driven by steady population growth and consumer trends towards healthy and natural foods. Nadec benefits from the government's direction to enhance food security as part of Vision 2030, providing opportunities for local and regional expansion. The sector itself is characterized by a high degree of competitiveness, with major companies such as Almarai, Savola, and Savi Danone among others. Nevertheless, Nadec maintains a strong market share due to its diverse product offerings and the integration of its supply chain from agriculture to manufacturing and distribution. On the other hand, the sector faces challenges such as rising raw material costs, price pressures, and climate fluctuations affecting agricultural production. Despite these challenges, Nadec remains one of the leading companies capable of adapting to market conditions and continuing investments in innovation and quality.

Nadec competes in the Saudi food market with several major companies, led by Almarai, which is the largest in terms of sales volume and presence in the dairy and juice sector. Following closely are the Saudi Dairy Company (Savi Danone) and Savola, which dominates oils and sugar, along with emerging companies in agricultural manufacturing such as National Agricultural Company (Nakheel) and Saudi International Food Company. Competition is based on quality, pricing, product diversity, and the ability to innovate. Nadec stands out with its ability to expand into new production lines and leverage vast agricultural areas, giving it an advantage in supply stability and cost reduction. The company also focuses on developing healthy and organic products to meet modern consumer trends. This combination positions it among the leading companies in the sector, with a constant effort to keep pace with innovations and benefit from government support programs dedicated to the food sector.

In 2024 and 2025, Nadec witnessed several strategic developments, the most notable being expansions in production lines, such as the opening of new juice canning factories and the expansion of greenhouse farms. The company also established distribution partnerships to enhance the presence of its products in various regions of the Kingdom, along with collaborations with governmental entities to support food security. Nadec has also focused on diversifying its product offerings by introducing innovative food solutions, such as organic dairy and preservative-free juices. The company invests in improving operational efficiency and raising quality standards through modern technologies. These initiatives aim to enhance the company's competitive position, meet increasing demand, and improve profit margins amid rising costs. These developments reflect Nadec's commitment to implementing sustainable growth strategies and innovation in the Saudi food sector.

The results for the fourth quarter of 2024 for Nadec showed continued revenue growth to a level of 1.1–1.2 billion SAR, representing an improvement of approximately 10% year-on-year. This growth reflects an increase in both domestic and international sales, particularly in the dairy and juice lines. However, net profit declined to around 45–55 million SAR, with an annual decrease of about 15%, attributed to inflation in operational costs and rising prices of feed and energy. The total annual profits for 2024 showed slight revenue growth, with a relative contraction in net profit compared to the previous year. These results highlight the importance of cost monitoring and improving operational efficiency, especially amid market pressures and price competitiveness in the sector.

Nadec has achieved positive growth rates in revenues over recent years, with annual revenue growth for 2024 reaching approximately 10–12% compared to 2023. This growth is primarily attributed to increased demand for food products and the company's expansions in production and distribution lines. However, in terms of net profit, the company faced pressures due to rising costs, leading to a decline in profits for 2024 by 10–15% compared to the previous year. These results reflect the challenges of the operational environment, particularly with rising input prices and fluctuations in commodity prices. Nevertheless, the company continues to invest in improving operations and diversifying its revenue base, aiming for sustainable profit growth in the future.

Nadec is committed to a regular cash dividend distribution policy for its shareholders, balancing the financing of future expansions with providing attractive returns to shareholders. The dividend yield has ranged between 3% and 5% annually in recent years, reflecting stable cash flows and the company's strong financial position. Management regularly reviews the dividend policy in line with financial performance and market conditions, taking into account capital needs and growth plans. The company also seeks to enhance shareholder value by improving operational efficiency, diversifying products, and investing in modern technologies. The stability of cash dividends is an important factor in attracting investors seeking regular income in the food sector.

Nadec Agricultural Company features a diverse ownership structure, combining government entities, private companies, and local and international financial institutions. The Saudi government is one of the major shareholders through key investment funds, reflecting the company's strategic importance in achieving national food security. Private companies and financial institutions also feature among the main owners, alongside individual investors and investment institutions. The company regularly announces updates on its ownership structure through disclosures in the Saudi financial market (Tadawul), ensuring transparency and enhancing investor confidence. This diversity in the shareholder base provides financial and strategic support for the company's initiatives and future expansion plans.

Nadec's stock experienced moderate price movements during 2024 and early 2025, with the stock price ranging between 20 and 22 SAR throughout the period. The stock's performance reflects fluctuations in the food sector and is influenced by seasonal factors and changes in profit expectations. The P/E ratio for the stock is approximately 15, placing it within sector averages, while the dividend yield hovers around 4%. Market indicators show that the stock enjoys good trading liquidity, and its performance is closely linked to the company's quarterly results and trends in the Saudi food sector. The stock is considered an attractive option for investors seeking relative stability and regular dividends in the Saudi market.

Nadec places increasing importance on innovation and sustainability across all stages of its operations, from agriculture to manufacturing and distribution. The company is working on developing healthy and natural products that meet the needs of modern consumers, focusing on organic foods and preservative-free juices. It also aims to apply sustainable agricultural practices and improve water and energy consumption efficiency in farms and factories. The company invests in modern technologies to enhance productivity and reduce waste, with a commitment to quality and food safety standards. These initiatives are an essential part of the company's vision for achieving long-term growth and keeping pace with global transformations in the food sector.

Nadec faces multiple opportunities for expansion in light of the government's direction to enhance food security and the increasing local demand for healthy food products. Expansions in production lines and investment in value-added products present opportunities to enhance market share and achieve sustainable growth. Conversely, the company faces challenges such as rising production costs, intense competition, and fluctuations in agricultural commodity prices. Additionally, regulatory and climate changes may affect production volume and raw material costs. The importance of continuing to invest in innovation and improving operational efficiency is highlighted to address these challenges and maximize the benefits from future opportunities in the Saudi food sector.