Tanmiah Food Company reported that for the quarter ending June 30, the company’s revenue grew 14.3% on a year-over year basis, with the main driver for that increase being growth in fresh poultry sales.
The Saudi Arabian company reported second quarter revenues of SAR498.7 million (US$132.9 million), with SAR419.7 million of that coming from fresh poultry sales, which was a year-over-year improvement of 10.3%.
Accounting for 84% of Tanmiah Food Company’s revenues, the company’s poultry segment performance is largely driven by capacity expansion, “as well as supportive government policies.
Despite the increases in sales revenue, the company’s net profit declined 62.25%.
“Despite the above growth in the top line, net profit remained lower, influenced significantly by prevailing pricing pressures in the market, a subsidy decrease, and ongoing efforts to bolster production capacity ramp-up efforts which outweighed the improved volumes during the quarter. Selling, General and Administrative Expenses (SG&A) also increased as Tanmiah remained focused on increasing its market reach by quickly expanding its distribution network, including the food franchise operations,” the company stated.
“Investments in production, distribution network, and food franchise operations continued for expedited ramp-up, which outweighed the increase in sales volumes. However, these effects are expected to normalize in the coming periods. Profit was subdued in the quarter as pricing levels remained under pressure in the market coupled with a lower subsidy payout.”
Feed and animal health
The company’s feed and animal health segment revenues expanded 18.5% to SAR59 millon during the quarter, with the company attributing those gains to “the increasing demand for animal health products and equipment.”
Food franchise operator segment
Food franchise operator revenues totaled SAR20 million during the quarter, which was up dramatically from the SAR5.8 million recorded during the second quarter of 2022.
During the most recent quarter, Tanmiah opened five Popeyes restaurants, bringing the total number of outlets now operating in Saudi Arabia to 31.
Tanmiah Food Company, according to information from the WATTPoultry.com Top Poultry Companies Database, is the seventh largest poultry producer in Saudi Arabia. During the past year, the company slaughtered 40 million broilers.
In 2022, U.S.-based Tyson Foods announced it was investing in Tanmiah Food Company.
Amy Tu, President, International and Chief Administrative Officer, Tyson Foods, said of the decision to invest in Tanmiah: "Tyson Foods is pleased to be partnering with Tanmiah in the Kingdom of Saudi Arabia to address the importance of food security. A key part of our strategic plan is to meet the growing global demand for protein and to serve customers and consumers with products tailored to the local market and region. Our partnership with Tanmiah Food will allow us to address that plan, especially the growing demand for Halal food. We are excited to build a long-term partnership and drive future economic activity in the Kingdom."
