RIYADH: The National Agricultural Development Company (NADEC) has launched a restructuring program to save SR120 million ($32 million).
In a statement to the Saudi stock exchange on Sunday, the company said the program will assess organizational setup, resource planning infrastructure, and financial performance.
NADEC will work with Bain & Company consultants throughout the program, which is expected to last two years.
NADEC expects the program to improve the company’s net profit in the range of SR40 million in the second quarter of 2021, with an overall impact of approximately SR120 million.
As the first and biggest agricultural share-stock company in Saudi Arabia, NADEC’s recent results revealed a loss for the third quarter ended Sept. 30, 2020. The company reported a net loss of SR44.9 million compared to a profit of 49.3 million riyals in the same quarter in 2019.
There were various causes for this loss, such as the 6.6 percent rise in sales costs, an 8.43 percent increase in selling and marketing expenses, and a 13.5 percent growth in general and administrative expenses.
In April 2020, NADEC’s board of directors appointed Steen Hadsbjerg as the new CEO after they approved the resignation of former CEO Abdulaziz Al-Babtain in March 2020.
Established by Royal Decree in the early 1980s, NADEC is the first agricultural company in Saudi Arabia to support agriculture, nutrition, and food security. The company is 20 percent owned by the government, with the rest publicly traded on the Saudi Stock Exchange. It is one of the largest integrated dairy companies in the world.