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Tanmiah Food Company, a leading supplier of fresh and processed poultry and other meat products, animal feed and health products and a franchisee of food brands, has announced results for the first half of the year ended June 30, 2022, with an annual growth rate of 31 % Revenue increased by 965.9 million riyals ($257.2 million) year-on-year. Gross margin improved to 23.3% from 22.8% in the first half of 2021, while EBITDA was 107.5 million riyals (up 30% year-on-year) and margin was 11.1%. Net income increased by 43% year-on-year from 22.2 million riyals to 31.7 million rials, supported by strong revenue performance and gradual price increases in the fresh chicken category.
Zulfiqar Hamadani, Chief Executive Officer of Tanmiah, said: “We continued to successfully execute our capacity expansion plans and achieved solid revenue performance as Tanmiah’s products continued to gain popularity in the first half of the year as we drove innovation across all products. The recently completed refurbishment project at our Majmah facility reached a production capacity of 420,500 chickens per day, which will further improve revenue and profitability in the coming quarters and is the key to our achievement of a production capacity of 1.2 million chickens per day by 2025 an important milestone of the goal.
“Despite volatile global commodity prices, our strong market positioning, and our customers’ growing preference for our diversified offerings, has allowed us to mitigate this impact through careful management of pricing, thereby improving margins during this period.”
He added: “As we embark on a new phase in Tanmiah’s journey with our landmark partnership with Tyson Foods, we hope to unlock significant long-term value for our shareholders by enhancing all stages of the value chain and diversifying our offerings, and Expansion of our global footprint. Overall, we will continue to make substantial investments in our business to further increase capacity and meet anticipated growing demand, which can be achieved through the launch of a new global halal brand in partnership with Tyson Satisfaction, the brand may be sold globally.”
Ahmed Osilan, Tanmiah Executive Board Member and Managing Director, said: “We are proud of the important milestones we have achieved since the beginning of the year, including our strategic partnership with Tyson Foods. We are expanding our capacity and strengthening our long-term relationships with key business partners. Continued investment in the company has enabled us to perform strongly during the period, thus successfully achieving significant growth in profitability.
“We are delighted to take our company to a whole new level by enhancing our technical expertise and taking advantage of new opportunities to achieve broad synergies across the group, while accelerating our pace of growth.
“Further supporting our strategic growth plan is the 150 million riyal financing facility recently secured by our subsidiary ADC from the Agricultural Development Fund. This is part of a comprehensive loan portfolio in line with the government’s ongoing initiatives to boost food production We remain committed to playing a pioneering role in strengthening Saudi Arabia’s food security and self-sufficiency goals, enriching the domestic ecosystem by bringing world-class industry expertise to the Kingdom and creating substantial employment opportunities in the local market, which will be This is the result of our important partnership with Tyson Foods.”
Income analysis
Tanmiah reported first-half revenue of 965.9 million riyals, up 31% from 734.9 million riyals year-on-year. Revenue growth was driven by strong performance across all segments, particularly fresh poultry and processed products, reflecting a combination of price and volume effects.
Sales of fresh poultry, which accounted for 69% of total revenue, rose 31% to 666.2 million riyals from 510.7 million riyals a year earlier. The growth in fresh poultry revenue was driven by continued capacity expansion, resulting in continued volume growth, in line with the growing popularity of Tanmiah products and gradual price increases across the fresh chicken category. Following the upgrade of Tanmiah’s facility in Majmah, north of Riyadh, the group’s daily production capacity was 370,000 units as of 2021 and increased to 420,500 units per day (net of leased capacity), an increase of 13.6%.
In addition, revenue from processed products increased by 31% year-on-year to 199 million riyals in the first half of 2022. The increase in sales was attributable to increased demand in the foodservice channel and gradual price adjustments for key foodservice customers during contract renewals.
Feed and animal health revenue increased by 26% to 91 million riyals in the first half of 2022, mainly due to increasing demand for animal health products and equipment.
Meanwhile, the food franchise operator recorded revenue of 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 Popeye stores in the kingdom, bringing the total number of stores in operation to 10 as of June 30.
growth strategy
Tanmiah’s strategy to further strengthen its market positioning hinges on organic and inorganic growth. To capture lucrative opportunities from growing poultry demand, coupled with the Kingdom’s strategic goal of achieving 80% self-sufficiency in the poultry industry by 2025, Tanmiah continues to invest heavily in capacity expansion and continues to Good progress.
The company’s local fresh chicken sales grew 9% year over year, from 49.2 million chickens in the first half of 2021 to 53.5 million in the first half of 2022, due to continued investment in its assets and operations. Tanmiah has recently completed the refurbishment of its factory in Majmah, which will increase its total production capacity from 370,000 chickens per day at the end of 2021 to 420,500 chickens per day (net of leased capacity).
Another important event for Tanmiah is the strategic partnership with Tyson Foods. Tanmiah sees this partnership as an important milestone in its 60-year journey, demonstrating its commitment to play a pioneering role in strengthening Saudi Arabia’s goals of food security and self-sufficiency. The partnership will also give Tanmiah access to global industry knowledge and may lead to new opportunities in the rapidly growing halal market. By leveraging this major collaboration, Tanmiah will be well-positioned to enhance its product, customer and geographic diversification, and create substantial value by advancing its operational processes, which will enable the company to achieve significant operational efficiencies and increase its revenue and profitability ability to move forward.
Tanmiah continues to leverage the government’s other strategic initiatives to strengthen the domestic food industry, with the company securing a short-term financing facility of 150 million riyals from the Agricultural Development Fund to finance grain imports. In addition, Tanmiah recently received a long-term Shariah-compliant loan of €48.2 million ($49.1 million) from Rabobank to further support its expansion plans.
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