Almarai Company SJSC

Almarai maintains a conservative capital structure with a debt-to-equity ratio of 0.6, indicating a balanced approach to financing. The company's liquidity position is characterized as medium, with a current ratio of 1.44, suggesting it can cover short-term obligations but with limited excess cash. Free cash flow is negative at -69.88 million SAR, primarily due to high capital expenditures of -2.29 billion SAR, which reflects ongoing investment in infrastructure and operations.

Profitability metrics show a return on equity of 3.45% and a return on assets of 1.76%, both below the industry median for Food Processing, indicating that Almarai is underperforming in terms of capital efficiency and asset utilization. Gross profit of 1.7 billion SAR and operating income of 792.95 million SAR suggest a stable but modest margin profile, with net income of 619.69 million SAR representing a 12.02% margin on revenue.

Geographically, Almarai's revenue is heavily concentrated in the Middle East and North Africa, with no disclosed diversification into other regions. The company operates in a single business segment, which increases exposure to regional economic and regulatory risks. No material revenue is attributed to international markets, and the company does not report segment-specific performance data.

Growth expectations for the current fiscal year are modest, with no significant revenue acceleration expected. The company's capital expenditures suggest a focus on maintaining and expanding production capacity, but the negative free cash flow indicates that these investments are not yet generating excess liquidity. Analysts have a cautiously optimistic outlook, with a mean price target of 56.05 SAR and a median of 57.00 SAR, reflecting a consensus of moderate upside potential.

Risk factors include a negative net cash position after subtracting total debt, which could limit financial flexibility in the event of a downturn. The company's liquidity risk is moderate, but its reliance on long-term debt (10.68 billion SAR) introduces refinancing risk in a rising interest rate environment. Dilution risk is currently low, with no near-term pressure from share issuance or convertible debt.

Recent filings and transcripts have not disclosed any material events that would significantly alter the company's strategic direction or financial outlook. The company continues to focus on operational efficiency and market expansion within its core region.

Revenue grew at an 8.6% CAGR from 2022 to 2026, demonstrating consistent top-line expansion over the four-year period.

Net income expanded at a 12.0% CAGR from 2022 to 2026, outpacing revenue growth and indicating improving profitability.

Operating and net margins exceed the 75th percentile of the Food Processing cohort, highlighting superior operational efficiency.

Analysts project 31.0% upside to the mean price target of 56.05 SAR, reflecting strong market confidence.

Cash conversion is rated best-in-class at 5.44, significantly outperforming the cohort median of 0.98.

Free cash flow turned negative in 2024 and deteriorated to -1.49 billion SAR in 2026, signaling cash generation issues.

Long-term debt increased to 13.04 billion SAR in 2026, up from 10.22 billion SAR in 2022, raising leverage concerns.

The company faces a high credit risk flag, indicating potential difficulties in meeting financial obligations or debt servicing.

Capex to revenue ratio is in the bottom quartile at -0.44, indicating heavy capital intensity relative to peers.

Revenue SAR 6.16B, +6,8% YoY; Operating income +0,1% YoY.

• ▍Revenue SAR 6.16B, +6,8% YoY
• ▍Operating income +0,1% YoY
• ▍Net income +0,1% YoY
• ▍Free cash flow +429,0% YoY
• ▍Net margin 11.9%

Revenue SAR 5.46B, +5,8% YoY; Operating income +4,1% YoY.

• ▍Revenue SAR 5.46B, +5,8% YoY
• ▍Operating income +4,1% YoY
• ▍Net income +7,9% YoY
• ▍Free cash flow −19,9% YoY
• ▍Net margin 8.5%

Revenue SAR 5.55B, +6,6% YoY; Operating income +2,0% YoY.

• ▍Revenue SAR 5.55B, +6,6% YoY
• ▍Operating income +2,0% YoY
• ▍Net income +7,5% YoY
• ▍Free cash flow −737,0% YoY
• ▍Net margin 11.0%

Revenue SAR 5.29B, +2,6% YoY; Operating income +2,6% YoY.

• ▍Revenue SAR 5.29B, +2,6% YoY
• ▍Operating income +2,6% YoY
• ▍Net income +4,4% YoY
• ▍Free cash flow +100,4% YoY
• ▍Net margin 12.2%

Revenue SAR 5.77B; Operating income SAR 874.1M.

• ▍Revenue SAR 5.77B
• ▍Operating income SAR 874.1M
• ▍Net margin 12.7%

Revenue SAR 5.16B; Operating income SAR 591.1M.

• ▍Revenue SAR 5.16B
• ▍Operating income SAR 591.1M
• ▍Net margin 8.4%

Revenue SAR 5.21B; Operating income SAR 742.4M.

• ▍Revenue SAR 5.21B
• ▍Operating income SAR 742.4M
• ▍Net margin 11.0%

Revenue SAR 5.15B; Operating income SAR 793.0M.

• ▍Revenue SAR 5.15B
• ▍Operating income SAR 793.0M
• ▍Net margin 12.0%

Revenue SAR 22.06B, +5,2% YoY; Operating income +2,2% YoY.

• ▍Revenue SAR 22.06B, +5,2% YoY
• ▍Operating income +2,2% YoY
• ▍Net income +6,2% YoY
• ▍Free cash flow −28,6% YoY
• ▍Net margin 11.1%

Revenue SAR 20.98B, +7,2% YoY; Operating income +11,2% YoY.

• ▍Revenue SAR 20.98B, +7,2% YoY
• ▍Operating income +11,2% YoY
• ▍Net income +12,9% YoY
• ▍Free cash flow −859,7% YoY
• ▍Net margin 11.0%

Revenue SAR 19.58B, +4,6% YoY; Operating income +18,3% YoY.

• ▍Revenue SAR 19.58B, +4,6% YoY
• ▍Operating income +18,3% YoY
• ▍Net income +16,4% YoY
• ▍Free cash flow −112,5% YoY
• ▍Net margin 10.5%

Revenue SAR 18.72B, +18,1% YoY; Operating income +13,0% YoY.

• ▍Revenue SAR 18.72B, +18,1% YoY
• ▍Operating income +13,0% YoY
• ▍Net income +12,6% YoY
• ▍Free cash flow +24,4% YoY
• ▍Net margin 9.4%