As announced earlier, the transaction involved the acquisition of a 60% equity stake of the Supreme Foods Processing Company (SFPC) by Tyson Foods, which was recorded as a one-off gain in the Income Statement. The gain on the disposal of a 15% equity stake in Agricultural Development Company (ADC) to Tyson Foods, amounting to SAR 74 million, was recorded directly in equity.

The main reasons for the change in net profit are as follows:

Revenue: Increased 42.8% to SAR 1,727.0 million, in line with the continued rise in sales across the company’s diversified portfolio of products and services. Fresh poultry was the primary driver of this strong performance during the year.

Cost of Sales: Increased 33.7% to SAR 1,306.9 million, as a result of the rise in sales volumes in FY22, as well as the sustained strategic growth plans that Tanmiah has undertaken to expand its production capacities.

Gross Profit: Increased significantly by 81.3% in FY22 to SAR 420.2 million, supported by a continued recovery in margins, and enhanced utilization of assets, along with improved operational efficiencies.

Selling, General, and Administrative Expenses: Increased 38.9% to SAR 306.7 million in FY22. This was commensurate to the higher volumes sold during the year.

The Company’s fast food franchise operations have continued to grow in line with Tanmiah’s plans, since the launch of POPEYES® in 2021. The Company ended the year with 20 outlets in operations and is targeting to further expand the store network across the Kingdom.

Fresh Poultry sales, the most significant contributor to the Company’s revenues (85%), increased 35.6% YoY to SAR 1,462.9 million in FY22. The segment’s positive performance continues to be driven by Tanmiah’ s expansion of production capacity, which is aligned to the rising local consumer demand for fresh poultry.

Feed and animal health revenues grew 79.8% YoY to SAR 234.5 million in FY22, due to a substantial increase in demand for animal health products and equipment.

Food franchise operator revenues amounted to SAR 29.6 million for FY22 (compared to just SAR 0.4 million in FY21), reflecting the first full year since the launch of the food franchise vertical. During the fourth quarter, Tanmiah opened 7 new POPEYES® stores, with 20 outlets now operating across the Kingdom.

Further Processed products revenues increased by 10% in FY22, thus continuing to show steady growth.

As per the applicable IFRS, the impact of this transaction is presented as a discontinued operation in Company’s financial statement.

Growth Strategy

Tanmiah remains on track to achieving the goals of its strategic growth agenda. The focus will remain on the expansion of the Company’s production capacity in fresh poultry, whilst continuing to drive innovation across the entire portfolio of products and services. The current operating environment within KSA is conducive to such growth plans, with the key enablers being strong economic fundamentals, a rapidly rising population, and a relatively high consumption of poultry per capita. According to industry sources, KSA’s poultry market is expected to witness steady growth over the next few years, supported in large part by wide-ranging government initiatives.

The Company has completed the strategic partnership with Tyson Foods Inc., whereby Tyson acquired a 15% equity stake in Agriculture Development Company (ADC) and a 60% stake in Supreme Foods Processing (SFPC). This landmark transaction is expected to propel growth and generate significant short and long-term returns. It represents one of the Company’s key milestones, bolstering Tanmiah’s commitment to supporting Saudi Arabia's food security and self-sufficiency objectives. With the potential for several avenues of value creation across all stages of the supply chain, Tanmiah is set to achieve a remarkable improvement in scale, geographical outreach, and operational efficiencies, while gaining exposure to advanced production techniques, aligned with the Company’s focus on sustainability and innovation.

Over the coming years, Tanmiah’s planned capital expenditure will be directed towards increasing feed milling and primary processing capacities, enabling it to seize new growth opportunities. The Company expects its capital investments to provide enhanced revenues and margins, supported by increased demand for its products.

Other diversification initiatives include the expansion of Tanmiah’s food franchise vertical, which was introduced in 2021, underpinned by the Company’s strategy of expanding the footprint of POPEYES® across the Kingdom over the coming years.