Costs squeeze Almarai’s 2Q earnings

Almarai squeezed

Surging costs drag down Almarai’s bottom line: Almarai posted a 1.7% y-o-y drop in net income to SAR 636 mn in 2Q, while revenue climbed 11% y-o-y to SAR 5.9 bn, according to an earnings release (pdf). Rising feed shipping costs for the dairy segment and higher energy-driven distribution expenses weighed on the food giant’s bottom line even as sales volumes expanded across all markets and product categories.

Meanwhile, the protein and bakery categories were the bright spots. Both posted higher net income y-o-y, carried by poultry volume growth from expansion projects and an improved sales mix in bakery.

Sumou and Arch will develop a mixed-use project in Jeddah

Sumou Real Estate inked an agreement with Arch 3 Real Estate — on behalf of Arch Real Estate Development Fund 3 — to develop a mixed-use project in Jeddah, according to a disclosure. The project will have a total built-up area of 57k sqm, with Sumou overseeing the entire development process from feasibility studies, design, and regulatory approvals through to marketing and sales.

The details: The project is expected to generate over SAR 700 mn in sales. Under the agreement, Sumou will receive a development management fee equal to 10% of the construction contract value, a marketing fee of 3% of total project sales, and a real estate brokerage commission of 2.5% of total sales. The agreement will run for 36 months from the date the project’s off-plan sales license is issued.