Riyadh, July 10 - Almarai Co., the Gulf's largest dairy company by market value, reported a 35.8 percent rise in second-quarter net profit, surpassing analyst forecasts.
Almarai made 165.3 million riyals ($44.1 million) in the three months to June 30, a record quarter according to Reuters data going back to 2004.
The company gave no reason for the increase in profit, which beat forecasts ranging from 123.2 million riyals and 146.86 million riyals in a Reuters survey last month.
First-half net profit rose 35.7 percent to 288.3 million riyals, paced by a 29.5 percent rise in sales to 1.71 billion riyals, Almarai said in a statement.
Almarai began consolidating the earnings of Western Bakeries and International Bakery Services Co., two companies it agreed to acquire in November, said Ibrahim al-Alwan, deputy chief executive at KSB Capital Group.
It had paid 709 million riyals in stock for the two companies.
"The two bakeries drove the rise in sales and profit," Alwan said. "The company faces strong competition in the core activity, dairy and food products, but it has managed to establish strong presence in neighbouring markets," he added.
Almarai plans to invest 4.7 billion riyals through to 2011 to "strengthen" its foodstuff business in the Gulf, it added.
The dairy firm is also part of a consortium led by Kuwait's Mobile Telecommunications Co. (MTC) that will start Saudi Arabia's third mobile phone operator, set to start operations in 2008.
The operator, which plans to raise $3.7 billion in the world's biggest Islamic loan to pay for part of its $6.11 billion licence, should turn its first profit in 2009, its Chief Executive Marwan al-Ahmadi said on Monday.
Almarai is aiming to achieve profits of 600 million riyals this year, a rise of 29 percent over last year, Prince Sultan bin Mohammed, Almarai chairman, told al-Eqtisadiah newspaper in March.