NADEC Q3 profit falls 72.5% to SAR30.4m on cost pressure

NADEC Q3 profit fell 72.5 per cent to SAR30.4m (about $8.1m) as higher feed, shipping and distribution costs outweighed revenue growth, the Saudi food producer reported on Sunday, 18 October.

National Agricultural Development Company earned SAR110.67m (about $29.5m) in the same quarter a year earlier. Revenue for the three months to 30 September rose 7.8 per cent to SAR909.72m (about $242.6m), according to results published on the Saudi Exchange and compiled by Argaam. Gross profit dropped 16.8 per cent to SAR242.61m (about $64.7m) and operating profit fell 77.5 per cent to SAR23.82m (about $6.4m).

NADEC Q3 profit hit by regional cost pressures

Chief executive Solaiman Altwaijri said the volatile regional environment had pushed up feed, shipping and distribution costs and squeezed margins, Argaam reported. He expects some of these external cost burdens to persist until business conditions return to normal.

The NADEC Q3 profit figure came in well below analyst expectations. Argaam’s compiled estimates had pointed to net profit of about SAR63m (about $16.8m) for the period, more than double the figure delivered.

Nine-month net profit fell 42.7 per cent to SAR188.66m (about $50.3m) from SAR329.35m (about $87.8m) in the same period of 2025, while revenue was broadly flat at SAR2.7bn (about $721m). Earnings per share for the nine months fell to SAR0.63 from SAR1.09.

Shareholders’ equity, excluding minority interests, stood at SAR4.79bn (about $1.28bn) at the end of September, up from SAR4.56bn a year earlier.

Protein growth offsets softer dairy and farming

The weaker result masks a shift in the company’s mix. Protein sales roughly doubled in the third quarter compared with a year earlier, while the core dairy and basic food business grew marginally and agricultural sales declined, according to the company’s disclosure as reported by regional media.

Mr Altwaijri said the protein segment was growing strongly and that the dairy and food processing business continued to offer scale, a trusted brand and a broad consumer base. Until conditions normalise, he said, the company would focus on operational discipline, capital allocation, supply-chain resilience and working capital management.

Current conditions are not expected to affect NADEC’s medium- and long-term strategic plans, he added. Near-term priorities include preparing packaged red meat products for retail, developing the Haradh slaughterhouse and the company’s joint venture with Hilton Foods, and building a higher-value, technology-driven agricultural business.

NADEC, founded in 1981 and based in Riyadh, is one of the kingdom’s largest dairy and food producers and operates across dairy and beverages, protein and agriculture. In its second-quarter update the company said the Haradh facility had been commissioned and that NADEC-branded, retail-ready red meat products were on track to reach shelves by the end of 2026. It also took full ownership of Al Raie National Livestock Company earlier this year, adding sheep and goat operations.

What the results mean for Saudi food stocks

The NADEC Q3 profit numbers highlight how regional disruption is feeding through to consumer-facing companies in the Gulf, even where demand remains firm. Rising input and logistics costs are a particular challenge for livestock producers that import feed, and investors will be watching whether rivals report similar margin erosion in the current results season.

NADEC’s shares had already fallen about 31 per cent so far this year before the results, according to Argaam data. The broader market has also faced pressure from record foreign outflows from GCC equities in the third quarter, with foreign institutions net sellers of SAR759.8m on the Saudi exchange last week alone.

Food security remains a stated priority under Vision 2030, and NADEC’s expansion into red meat and controlled-environment farming is aligned with that agenda. The company’s ability to pass higher costs through to retail prices, and the timing of its Hilton Foods venture reaching shelves, will shape whether margins recover into 2027. Investors can read the full disclosure on the Saudi Exchange, and follow further regional business news on Outlook Middle East.