Baladna’s 2024 Success: Strong Sales Growth and Higher Margins Drive Record Profits
• The company's sales revenue increased 8% year over year.
• Baladna’s share price increased as much as 8% during 2024.
• Net profit increased, driven by the increased sales as well as significant improvement in gross profit margin.
Baladna's stock price experienced a notable increase throughout the year 2024. Starting at 1.22 riyals per share, the stock closed the year at 1.32 riyals per share, representing an increase of approximately 8%. In comparison, the QSE index dropped by approximately 2% over the same period. This indicates that the company's stock performance overperformed compared to the market average.
Here are the key numbers:
● Sales Revenue: 1,145 million QAR vs. 1,057 million QAR in 2023 (an 8% YoY increase).
● Gross Profit: 260 million QAR vs. 194 million QAR in 2023 (a 34% YoY increase).
● Net Profit: 185 million QAR vs. 109 million QAR in 2023 (a 70% YoY increase).
● Earnings per Share: 0.097 QAR/share vs 0.058 QAR/share in 2023 (a 67% YOY increase).
● Dividend per Share: no cash dividend in 2024 (0.07 QAR/share in 2023). Stock dividend 1 bonus share for each 19 shares.
Baladna, Qatar’s largest dairy and beverage manufacturer, plays a vital role in ensuring sustainable food security within the country. As the leading supplier of dairy products, Baladna contributes significantly to reducing the nation’s reliance on imported goods. However, similar to many companies in Qatar’s food sector, Baladna remains reliant on government subsidies to support its operations.
In 2024, Baladna reported a profit of 185 million QAR, with government subsidies accounting for 105 million QAR of that amount. While the company’s profitability is still heavily supported by these subsidies, there is a positive trend emerging. Compared to previous years, Baladna has shown that it could achieve profitability even without these subsidies, signaling an improvement in its financial health.
This growing reliance on government support presents a challenge for Baladna’s management, as they must now focus on reducing dependency and steering the company toward self-sustainability. The key question is how to achieve long-term profitability without substantial government aid.
In terms of performance, 2024 saw significant growth for Baladna, with an 8% increase in sales revenue compared to the previous year. This sales growth was a critical factor in driving the company’s net profit, which reached 16 million QAR. Alongside this growth, the company also saw a notable improvement in its gross profit margin, which rose from 18% in 2023 to 23% in 2024, making a significant positive impact on the net profit amounted to 50 million QAR.
This improvement in gross profit margin can likely be attributed to one or more of the following factors: a reduction in production costs, adjustments to the pricing strategy, or a shift in the product mix with higher-margin products driving sales. Regardless of the specific factors at play, it’s essential for management to continue focusing on these improvements and explore further ways to optimize costs and maximize profitability.
Additionally, Baladna’s financial investments, which are measured at fair value through profit or loss, experienced a positive adjustment in 2024. While this adjustment only contributed a minor 8 million QAR to the company’s net profit, it highlights the importance of income diversification. However, these types of investments can be unpredictable and are often beyond the company’s control, making it crucial for Baladna’s management to stay focused on its core operations to ensure sustainable profitability.
When analyzing the company’s expenses, a noteworthy decrease in finance costs was observed, which helped improve net profit by 11 million QAR. This reduction is a positive sign that the company is effectively managing its financial obligations and optimizing costs.
For a more detailed overview of Baladna’s financial performance, please refer to the reliable source at sahmik.com.