Saudi-listed dairy giant Almarai Company reported a 7.06% increase in net profit at 557.08 million Saudi riyals ($148.45 million) for the second quarter of 2023, compared to 520.36 million riyals in the year-earlier period.

The higher profit was driven by increased revenue and improved operational efficiencies. However, the earnings were slightly impacted by rising funding costs in line with SAIBOR interest rates.

“Stable trading conditions have resulted in another positive quarterly performance for Q2 2023,” the company said in a statement.

The Gulf’s largest dairy producer’s H1 2023 net profit rose 26.71% year-on-year to 1.19 billion riyals.

The company stated that the key risk remains global cost inflation for dairy and feed commodities, although most have come off their peak levels in recent months. However, they still remain at elevated levels compared to the prior year.

Almarai said it continues to manage the risks by better hedging activities and leveraging its stock cover.

In April, the company’s shareholders approved a 10% cash dividend.

(Editing by Seban Scaria seban.scaria@lseg.com)