Saudia Dairy and Foodstuff Co.’s (SADAFCO) strong financial results were spurred by the healthy growth of its sales volume across the sector, and not as a result of an increase in prices, said CEO Patrick Stillhart.
He told CNBC Arabia that his company witnessed selective rise in prices of some products due to the increase in costs of raw materials, which could not be avoided.
The Tadawul-listed company has concerns with respect to the rise in prices, as it seeks to maintain its consumers. It also has a priority of being consumer-oriented and does not wish to risk the quality of its products, according to the top official.
In his response to whether the company could raise prices in the second half of this year, Stillhart stated that this depends on market developments with regard to raw materials and costs related to packaging and other costs. “It cannot be said currently whether prices will be raised,” he said.
The CEO also indicated that the last quarter saw an increase in the company’s market shares, as it leads the market in the dairy and ice cream segment and other products.
During the first half of this year, SADAFCO faced two challenges related to increased costs and the supply chain problem. It worked on ensuring the availability of raw and packaging materials in order to maintain production, Stillhart added.
Commenting on higher interest rates, the CEO affirmed that SADAFCO has a strong position with zero debts and will not be affected by higher rates. The company hopes to leverage increased interest rates, due to the cash balance in its bank accounts.
Elsewhere, Stillhart concluded that SADAFCO always has plans to utilize the available cash flows, but there are no specific details in this regard.
In the first quarter ended June 2022, the dairy producer posted a 42% rise in net profit to SAR 54.3 million, compared to SAR 38 million a year earlier, Argaam reported.