Al-Jouf Agricultural CEO Mazen Badawood expects demand and profit margins to improve as new crops enter production, despite pricing pressure from imported processed products. Net profit fell 78% in H1 2026.
Alpha Score of 40 reflects weak overall profile with moderate momentum, poor value, moderate quality, moderate sentiment.
Al Jouf Agricultural Development Co. CEO Mazen Badawood expects demand and profit margins to improve in the coming periods, supported by lower production costs as new crops enter production, despite continued pricing pressure from imported processed products, particularly frozen French fries.
Speaking to Argaam, Badawood said the company did not see a material impact on product availability during Q2 2026 within its operations. Geopolitical developments and supply chain disruptions did not significantly affect raw material availability during the period, he said.
The decline in net profit was driven by higher cost of goods sold for processed products due to unusual weather during the 2025 agricultural season, the CEO said. Lower selling prices for processed products amid pricing pressure from imports, weaker French fries sales, and higher operating and Zakat expenses compared with the year-earlier quarter also weighed on results.
Pricing pressure on processed products, particularly French fries, due to competition from imports hurt first-half results. Badawood estimated the impact at around SAR 24 million compared with the first half of last year.
Production costs were affected by unusual weather conditions during the 2025 agricultural season, which had a significant impact on Q1 results. The introduction of new crops at the end of Q2 2026 helped improve profit margins compared with Q1, Badawood said. He expects production costs to continue improving as larger volumes from the 2026 harvest enter production, supporting stronger profit margins.
Agricultural product sales are concentrated toward the end of Q2 and throughout the second half of the year, coinciding with the harvest and marketing season, Badawood noted. Olive oil and agricultural product sales grew, and he expects demand for processed products to continue growing in H2, supported by sustained market demand.
On the subscription agreement signed with Almunajem Foods Co. for its entry as a strategic investor, Badawood said the agreement was signed and announced in recent days. Subject to obtaining all required approvals for the subscription, the company expects the agreement to represent a strategic step for both companies and support their future operations, he said.
Al-Jouf Agricultural's net profit fell 78% year on year to SAR 11.5 million in H1 2026, from SAR 53.1 million a year earlier, according to Argaam data. Q2 2026 net profit declined 49% to SAR 9.5 million.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.