Almarai Company - Q1 FY2026 Earnings Analysis

Performance Highlights

Almarai reported Q1 FY2026 revenue of SAR 6.16 billion, a 7% year-on-year increase that modestly exceeded consensus expectations, while net profit attributable to shareholders held essentially flat at SAR 732 million versus SAR 731 million a year prior. EBIT margin came in at approximately 14%, within the company's stated 14–16% operating range, as disciplined cost control offset diesel cost inflation and elevated factory ramp-up expenses across the Protein segment.

Volume growth was the singular revenue driver, with pricing slightly negative overall due to competitive conditions in poultry; Egypt delivered a third consecutive quarter of 20%-plus volume growth, contributing meaningfully to both top-line and bottom-line performance. The Protein segment crossed SAR 1.1 billion in revenue for a second straight quarter on sales of 81 million birds, while Bakery benefited from a mid-2025 pricing adjustment, and Long-Life Dairy posted 13% growth largely on Egyptian volume and GCC panic-buying demand.

Management Outlook and Forward Catalysts

Management signalled that CapEx has likely peaked following the SAR 18 billion investment programme, with annualised spend beginning to decline from the 2025 high, and full-year poultry capacity is targeted at approximately 330 million birds toward an eventual 450 million. A proposed dividend reflecting a 15% year-on-year increase was flagged for AGM approval on 21 May, and the company drew down an additional SAR 1 billion from committed facilities as a precautionary liquidity measure tied to the Iran conflict.

The central investor debate for Q2 centres on the duration and severity of the Iran-conflict's supply-chain impact, specifically whether freight costs stabilise or remain near USD 9,000 per container, which management acknowledged would have a material income-statement effect if sustained through year-end. Bulls will watch for accelerating Protein margin recovery toward and beyond the Q1 level of approximately 10%, poultry pricing normalisation, and Egypt's continued contribution, while bears will monitor freight cost pass-through timing, tourism-linked HoReCa volume erosion across the GCC, and any deterioration in the Egyptian pound.