First Mills profit grows 5% to SAR 77.7M in Q1 2024

First Milling Co. (First Mills) reported a 5% rise in Q1 2024 net profit to SAR 77.7 million from SAR 73.8 million in the prior-year period.

The profit increase was driven by an 8.2% year-on-year (YoY) increase in revenue to SAR 276.4 million. This was mainly driven by the strong high double-digit sales growth in fodder of 27% YoY due to higher demand, alongside the robust 8% YoY rise in flour sales, thanks to the additional capacity of Mill C in Jeddah and the Ramadan seasonality.

Higher Q1 2024 revenue was also supported by the improved product mix and the recent launching of the Durum Mill producing semolina. Bran sales, however, decreased by 17% from last year's same quarter as a result of the company’s decision to prioritize the intake of fodder production to fulfill the growth in demand.

During the three-month period, gross profit also increased by 4.5% to SAR 125.6 million, compared to SAR 120.1 million in Q1 2023, mainly driven by higher revenue growth and costs optimization.

Operating expenses (OpEx) remained at the same level as last year’s comparative period. The slight uptick in selling and distribution costs was to support the revenue growth.

As a result, the net profit margin (NPM) increased by SAR 4 million YoY in Q1 2024 and remained at a strong level of 28% of revenue.

The Q1 2024 profit hike was also driven by the optimization of cash by improving interest income from the Shariah-compliant Murabaha deposits.

Compared to the previous quarter, net earnings jumped 35.2% from SAR 57.5 million in Q4 2023.

Revenue increased by 12.1% quarter-on-quarter (QoQ) to SAR 276.4 million in the current quarter.

This was mainly driven by the strong QoQ growth in flour sales by 15% on continued upswing in small pack sales and Ramadan seasonality. Bran sales also witnessed a strong QoQ rise of 42%, lifted by better demand.

Gross profit for Q1 2024 climbed by 20% to SAR 125.6 million, compared to SAR 104.6 million in the previous quarter. This was primarily due to higher revenue growth, the launch of the new Durum Mill and better product mix.

For the same period, OpEx was maintained at the same level as the previous quarter. The modest quarterly surge in selling and distribution costs was to support the revenue growth.

Accordingly, the NPM soared to 28% in Q1 2024, against 23% for the previous quarter.

Shareholders’ equity, no minority interest, increased to SAR 888.35 million as of March 31, 2024, compared to SAR 820.60 million in the year-earlier period.

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