The contract includes the construction works for the preparation of infrastructure, structures, and poultry houses buildings. These constructions are to be operated in line with modern quality standards and the latest technology utilized in the table egg production sector. This is part of the company’s continuous efforts to develop its projects, expand its operations, and increase its production capacity.

The project has been designed and planned to construct breeding and production barns, aiming to increase the poultry sector’s capacity by 450% compared to its current capacity. This will enable an increase in production to approximately 165,000,000 eggs annually, in line with the overall expansion plan for the poultry sector.

The project will be implemented in two phases, allowing the first phase to be operational before the entire project is completed, thus enhancing operational efficiency during the first year. Click here To view the announcement on Saudi Exchange (Tadawul)

2- Appointing Professor Obaid bin Saad AlMotairy as a member of the Board of Directors, replacing the resigned member, effective from 03-06-1446 AH, corresponding to 04-12-2024, until the end of the current board term.

3- Appointment of Dr. Abdullah bin Omar Al-Husseini as a member of the Remuneration and Nominations Committee, replacing the resigned member, effective from 03-06-1446 AH, corresponding to 04-12-2024, until the end of the current committee term.

The Board of Directors would like to thank Mr. Zaid Nehad Al-Nathir for his efforts and wish him all the best. Click here To view the announcement on Saudi Exchange (Tadawul)

Net profit decrease reason is due to sales decreased and expenses increased caused by financial impact of entering the poultry sector, and costs related to execute its branch expansion strategy.

The company achieved 9% increase in revenue in the current quarter compared to the previous quarter of this year. This growth reason due to the increase in retail sales table egg sector sales, and logistic transportation revenue.

Despite an increase in operating profit in the current quarter compared to the previous quarter, net profit decreased by 8.5%. This decline was primarily due to several non-operational factors, including reduced the capital gains from asset sales, as well as 

previously disclosed sale of the Riyadh factory land and the decrease in Time deposit revenue.

The company’s revenue for the current period decreased by 8.3% primarily due to a decline in wholesale sales. At the same time the company focused on retail expansion strategy which caused an 33% growth in retails sector.

Net profit decreased in the current period compared to the same period last year, impacted by several key factors. The most significant was the company’s strategic entry into the table egg production sector as part of company aims to revenue diversification, Additionally increased selling and distribution expenses related to branch expansion, a decrease in other revenue streams, and formed provision for doubtful receivables further contributed to the decrease in net profit. Click here To view the announcement on Saudi Exchange (Tadawul)

The reason for the decrease in the company’s sales is attributed to changes in sales in both the retail and wholesale sectors, resulting from the company’s strategy aimed at expanding the opening of retail branches. This expansion led to an increase in retail sales; however, the decline in wholesale sales contributed to the overall decrease in sales. Furthermore, changes in demand for different products due to shifts in consumer behavior resulted in an increase in the share of low-priced products, which contributed to the decline in sales.

The reason for the decrease in net profit during the current quarter can be attributed to the decline in sales in the water sector, along with an increase in expenses related to the opening and expansion of branches. Additionally, rising transportation costs due to fuel price hikes have played a role. This decrease was also supported by expenses in the poultry sector, which is still under the company’s future expansion plan.

Sales in the current quarter decreased by 2.9% compared to the previous quarter. This decline resulted from a decrease in wholesale sales due to the company’s focus on enhancing branch openings and expanding retail sales. Additionally, the overlap of holidays with the current quarter had a negative impact on sales compared to the previous quarter.

The company achieved growth equivalent to 39% in net profit after zakat. This increase was supported by capital gains resulting from the exclusion of assets related to the company’s expansion plans. This growth occurred despite the decrease in sales. The earnings per share for the current quarter reached SAR 0.55.

Sales decreased by 7.5% due to changes in sales in both the retail and wholesale sectors, resulting from the company’s strategy aimed at expanding the opening of retail branches. This decline was also supported by a shift in the sales mix of water products due to consumer preferences towards purchasing lower-priced varieties.

The reason for the decrease in net profit during the current period compared to the same period is attributed to a decline in sales in the water sector, along with an increase in expenses related to opening and expanding branches. Additionally, rising transportation costs due to fuel price hikes have had an impact. This decrease was further supported by expenses in the poultry sector, which is still part of the company’s future expansion plan. Moreover, this decline was reinforced by a shift in the sales mix of water products due to consumer preferences towards purchasing lower-margin varieties. Click here To view the announcement on Saudi Exchange (Tadawul

A 2% increase in gross profit, primarily due to a 24% decrease in the cost of sales resulting from lower raw material prices and reducing manufacturing operating costs. Despite a decrease in sales volume, and the company’s strategic shift in its sales channels as part of its expansion plan, the gross profit increased. It is worth noting that the company managed to reduce the cost margin by 7%.

A 5% increase in operating profit, resulting from growth of gross profit and an increase in other revenue. The increase in other revenue is attributed to the company’s investment of its cash surpluses in Islamic financing deposits, as well as the utilization of its transportation fleet for customer cargo transportation. The rise in operating profit occurred despite an increase in selling and distribution expenses, general and administrative expenses, associated with the company’s expansion plans, including the opening of new branches, along with expenses related to new projects and the increase in fuel costs for sales vehicles and transport trucks due to higher fuel prices.

Furthermore, Zakat provisions decreased according to estimates of the company’s Zakat base, despite an increase in financing costs.

The net profit for the current quarter increased by 22% compared to the previous quarter of the current year. This increase can be attributed to the following reasons:

A 10% increase in gross profit, resulting from a 10% increase in sales and the company’s ability to maintain sales costs in line with previous rates during the preceding quarter.

A 21% increase in operating profit, driven by the growth of gross profit as well as the increase in other revenue sources due to the company’s investment of its cash surpluses in Islamic financing deposits and the enhancement of its transportation fleet. Additionally, the company managed to maintain general and administrative expenses at their lowest levels. This increase in operating profit occurred despite an increase in selling and distribution expenses due to the company’s expansion in its sales channels according to its expansion plan.

Moreover, financing expenses decreased by 29% due to the financial flexibility of the company and its ability to meet its obligations, along with the stability of Zakat provisions.

The net profit for the first nine months of 2023 decreased by 12% compared to the same period of the previous year. The reasons for this decrease are as follows:

A 5% decrease in gross profit, despite a 15% decrease in sales. This can be attributed to the company’s ability to reduce sales cost margins by 4%. The decrease in sales occurred because of redistributing sales capacities during the first half of the current year to align with the company’s expansion plans and the opening of new branches.

An increase in selling and distribution expenses, as well as general and administrative expenses, due to the company’s expansion in opening new branches and strengthening its sales channels. Additionally, the costs of transportation and distribution increased due to rising fuel prices.

An increase in other revenues resulting from the company’s investment of cash surpluses in Islamic financing deposits and the utilization of its fleet to provide transportation services to its customers.

An increase in financing expenses due to the company’s expansion in leasing activities, despite a decrease in Zakat provisions to align with the Zakat base.

The current revenues mark the beginning of the production process, the company said in a statement to Tadawul today.

Naqi Water also stated that the financial impact of the project is expected to appear in the fourth quarter of 2023, underscoring its commitment to its plan to increase production and sales capacity.

In July, Naqi Water signed a contract to acquire a poultry project for egg production from Abdullah bin Saleh bin Abdullah Al-Bethi for Poultry in Qassim for SAR 7 million, according to data available on Argaam.

In reference to the company’s announcement on the Tadawul website dated 04-07-2023 regarding signing of a contract to purchase a poultry project for egg production, the company would like to announce to its shareholders the results of the project’s fundamental developments, which are as follows:

I: The company completed all legal procedures pending the purchase of the poultry project, which resulted in Naqi Water Company owning the entire project and 100% of all its assets.

II: The company worked on signing an agreement to supply Lohmann egg-producing poultry with a number of 103,000 birds according to the following:

– The age of the poultry agreed to be supplied is 17 weeks, noting that the poultry shall begin full production at 20 weeks old.

– The supply agreement contributes to utilizing the project’s current capacity to reach 85%, compared to 42% when purchasing the project.

– The agreement contributes to increasing production capacity by 161% compared to previous production capacity.

The company confirms that it is working to exploit the remaining capacity of the project in addition to raising production capacity by increasing the efficiency of production elements.

It is expected that the financial impact of these developments shall begin to be reflected during the fourth quarter of the fiscal year 2023, and in a better way than the initial expectations from the previous announcement.

Financial Impact on the change

The total value of the supply agreement with an amount of SAR 2,410,519 and there is no other financial impact.
Supply agreement was financed internally from the company’s own sources without resorting to financing from any external party.