Feed Growth Lifts First Mills H1 Profit 11% to SAR 146M

Feed Growth Narrows the Gap With Flour

Animal feed revenue reached SAR 101.9 million in Q2, up 78.7% year on year, and SAR 231.2 million in H1, up 68%. The gains followed the acquisitions of Al Manar Feed and Al Kinan Al Arabia Trading, which added production and distribution capacity, with better capacity utilization also helping, Ababtain said. The Q2 pace reflects continued expansion, with the product mix evolving toward specialized lines, he said. The gap between the two segments' Q2 revenue narrowed from roughly SAR 83 million a year earlier to about SAR 69 million.

He cautioned against reading the quarter-on-quarter comparison literally, saying the nature of the business and differences in the comparison base distort the sequential number. Feed revenue in Q2 fell from SAR 129.3 million in Q1 on the disclosed figures. The segment's performance "should instead be assessed based on key operating indicators," he said, naming revenue growth, distribution network expansion, specialized product development and sustained demand from poultry buyers as the relevant gauges.

Beyond acquisitions, the company launched animal feed exports for the first time during the half, a step Ababtain said should raise utilization of the expanded capacity. The launch gives the feed business a sales channel outside the domestic market. First Mills will keep developing the feed business with pricing discipline and cost control, he said.

Geopolitical Risk and the Supply Chain

Operations stayed stable through H1. Ababtain attributed that to a proactive approach on supply chain and risk management, even with geopolitical developments in the region. The company diversified its sourcing channels and held what it called appropriate levels of safety stock for raw materials. Shipping networks and alternative logistics routes stayed under continuous review, with regular contact maintained with suppliers and logistics providers to anticipate potential disruptions. A serious disruption to shipping would stress those arrangements, he said.

First Mills also strengthened its sales and operations planning and ran ongoing risk assessments, with contingency plans in place, he said. Ababtain said the half passed without material impact on production or product deliveries, and inventory availability was unaffected.