Saudi First Mills Logs Over 5% Growth In Full-Year Revenue

Saudi-based flour producer First Milling Company (First Mills) said Monday its net profit edged up by 1.3% to $58.7 million (SAR 220.2 million) in 2023, driven by higher sales volume in the flour category, according to a regulatory filing on the Saudi bourse.

FY2023 performance

• First Mills reported a 5.5% revenue growth to $257.1 million (SAR 964.3 million) in 2023. This increase was driven by a surge in fourth-quarter revenue, which rose by 8.8% year-on-year to $65.7 million (SAR 246.6 million), primarily due to increased sales of flour and bran.
• Total comprehensive income for 2023 plummeted by 6.2% to $55.3 million (SAR 207.4 million), but total shareholders' equity (after deducting the minority equity) grew by 18.8% to $237.9 million (SAR 892.1 million), the filing showed.
• Revenues from flour, the company's largest product segment, grew by 9% year-on-year in 2023, despite the shutdown of Mill C for capacity upgrade, driven by higher demand due to launching new products and strong growth in small pack sales. First Mills said its flour brand AlOula has witnessed a 37% year-on-year growth in small-pack sales last year.
• Bran and feed sales also grew by 5.9% and 6%, respectively, in 2023, as the company boosted production to meet growing demand, the Saudi-based company said.
• First Mills' basic earnings per share (EPS) dropped to $1.06 (SAR 3.97) in 2023, compared to $6.5 (SAR 24.33) a year earlier.

Higher fourth-quarter profit

Saudi First Mills reported a notable 183% year-on-year jump in its net profit during the fourth quarter of 2023, reaching $15.3 million (SAR 57.5 million) from $5.4 million (SAR 20.3 million) for the same period a year ago.

The company attributed this significant profitability to both revenue growth and the recording of non-recurring, one-time expenses in the same quarter of the previous year, totaling approximately $5 million (SAR 19 million). These expenses included corrections for depreciations, provisions for legal issues, and other public offering expenses, as shown in the filing.

Shares up

First Mills shares traded 2.1% higher on Monday, reaching $22.4 (SAR 84) as of 1 pm GST, bringing its market capitalization to $1.2 billion (SAR 4.6 billion) as of March 11, 2024.

The company debuted trading on the Saudi Exchange on June 22, 2023, following its successful initial public offering (IPO) that raised $266.4 million (SAR 999 million).

Big numbers

First Mills has a silos storage capacity of 220,000 tons, and a daily milling capacity of 4,900 tons, according to its website.

Largest investors

First Mills, the kingdom’s producer of flour, feed, bran, and wheat derivatives, was established by Saudi’s sovereign wealth fund, the Public Investment Fund (PIF), and was privatized subsequently. It was sold to the Al Raha Al Safi Food Company consortium for $540 million in 2020 in the first of several flour mill privatizations in Saudi Arabia.

As of March 10, First Mills’ biggest shareholders include Riyadh-based investment firm Almutlaq Group, which owns 30% of shares, followed by Abdullah Abu Nayyan Trading Company with 21% share ownership, and Al Safi Advanced Investment Company with 12%, according to Saudi Exchange. Meanwhile, Dubai-based Essa Al Ghurair Investment holds 7% of First Mills's stake.