Almarai says third-quarter profit flat, warns of tough market conditions

Almarai said on October 15 that Public Investment Fund, Saudi Arabia’s top sovereign wealth fund, had increased its share capital in the company to 16.32 percent. (Reuters)
Updated 22 October 2017
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Almarai says third-quarter profit flat, warns of tough market conditions

DUBAI: Saudi Arabia’s Almarai, the Gulf’s largest dairy company, reported a flat third-quarter net profit on Sunday, and warned it remained cautious on the year due to adverse market conditions.
Almarai made a profit of 667 million riyals in the three months to September 20, compared to a revised quarterly profit of 664.3 million riyals in the year-earlier period, according to a bourse statement.
Four analysts polled by Reuters had forecast on average that Almarai would make 620.75 million riyals.
Revenue was down 4.5 percent to 3.37 billion riyals from the same period a year earlier.
Almarai said tough market conditions continued into the third quarter and that its end of year outlook remains cautious, citing reasons such as higher operating costs, devaluation of the Egyptian pound and lower exports.
Almarai has lost access to the Qatari market since June after Saudi Arabia severed trade and travel links with its neighbor in the Gulf’s most severe diplomatic split in years.
Almarai said on October 15 that Public Investment Fund, Saudi Arabia’s top sovereign wealth fund, had increased its share capital in the company to 16.32 percent.


OPEC oil ministers gather to discuss production increase

Updated 19 June 2018
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OPEC oil ministers gather to discuss production increase

  • Analysts expect the group to discuss an increase in production of about 1 million barrels a day
  • The officials were arriving in Vienna ahead of the official meeting Friday

VIENNA: The oil ministers of the OPEC cartel were gathering Tuesday to discuss this week whether to increase production of crude and help limit a rise in global energy prices.
The officials were arriving in Vienna ahead of the official meeting Friday, when they will also confer with Russia, a non-OPEC country that since late 2016 has cooperated with the cartel to limit production.
Analysts expect the group to discuss an increase in production of about 1 million barrels a day, ending the output cut agreed on in 2016.
The cut has since then pushed up the price of crude oil by about 50 percent. The US benchmark in May hit its highest level in three and half years, at $72.35 a barrel.
Upon arriving, the energy minister of the United Arab Emirates, Suhail Al Mazrouei, said: “It’s going to be hopefully a good meeting. We look forward to having this gathering with OPEC and non-OPEC.”
The 14 countries in the Organization of the Petroleum Exporting Countries make more money with higher prices, but are mindful of the fact that more expensive crude can encourage a shift to renewable resources and hurt demand.
“Consumers as well as businesses will be hoping that this week’s OPEC meeting succeeds in keeping a lid on prices, and in so doing calling a halt to a period which has seen a steady rise in fuel costs,” said Michael Hewson, chief market analyst at CMC Markets UK
The rise in the cost of oil has been a key factor in driving up consumer price inflation in major economies like the US and Europe in recent months.
Already US President Donald Trump has called on OPEC to cut production, tweeting in April and again this month that “OPEC is at it again” by allowing oil prices to rise.
Within OPEC, an increase in output will not affect all countries equally. While Saudi Arabia, the cartel’s biggest producer, is seen to be open to a rise in production, other countries cannot afford to do so. Those include Iran and Venezuela, whose industries are stymied either by international sanctions or domestic turmoil. Iran is a fierce regional rival to Saudi Arabia, meaning the OPEC deal could also influence the geopolitics in the Middle East.