Almarai Company (2280) Earnings Call Transcript & Summary

Good afternoon, everyone. This is Fahad Irfan from sell-side Research at Al Jazeera Capital. On behalf of AlJazira Capital, it is my pleasure to welcome you all to Almarai's earnings call for Q3 2026. I'm pleased to welcome panelists on the call today. Amongst our panelists, we have Mr. Fawaz Al-Jasser, the Chief Executive Officer; Mr. Ikram Ulhaque, Chief Financial Officer; and Mr. Abdulhadi Alamri, Head of Investor Relations, Governance and Compliance. We will start the call with the management before opening the floor for participants for the Q&A session. I will start by handing over to the Head of Investor Relations, Mr. Abdulhadi. Mr. Abdulhadi, the mic is yours.

Good afternoon, everyone, and thank you for joining Almarai's First Quarter 2026 Earnings Call. This is Abdulhadi Alamri, Head of Investor Relations at Almarai. And I'm joined today by our CEO, Mr. Fawaz Al-Jasser; and our CFO, Mr. Ikram Ulhaque. Thank you as well to AlJazira Capital for hosting the call and to Fahad Irfan for moderating today's session. Our Q3 2026 earnings presentation is available on Almarai website, and we will take you through the key developments in the business and our financial performance before opening the floor for Q&A. Before we begin, I would ask everyone to take note of the disclaimer, especially the section relating to the forward-looking statements, underlying assumptions and potential risks. Our comments today should be considered alongside Almarai's published financial statements and regulatory disclosures. With that, I will hand it over to Ikram to take us through Almarai's performance for the third quarter and the first 9 months of 2026.

Thank you very much, Abdulhadi. [Foreign Language] and good afternoon to all. Let us get straight into the Q3 performance, which was an excellent quarter. If we can go to market dynamics, thank you. So we go to Slide #5, and it's good to see #1 on the right-hand side for all the 5 core categories. Almarai as you can see, Almarai is #1 in dairy, juice, food, bakery and poultry as well. If you remember last quarter, we talked about food category where we have a temporary adjustment. It's good to see back our #1 position and happy to report that everything is going well in that respect. With that said, I would like to move to the next slide, which is our innovation for the third quarter. And I trust that virtually all of you have tried at least 2, if not 3 or more of the new innovations this quarter. As you can see, the exciting range of iced tea, muscle milk and you can see the new categories within breast fillet and new flavor extension in poultry as well. As much as they're great from a consumer perspective, I'm double [indiscernible] as a CFO, as you can see, most of them, virtually all of them are very positive, both from a margin and a pricing perspective. So you can see Almarai portfolio is getting revamped towards a more improved margin-accretive portfolio. With that said, let me now move to the Q3 performance. If you can go to Slide 8. Let us go through the key highlights for the quarter. I'll start from the top left-hand side, and I'll go in one line direction. So let me start with revenue first. 11% growth year-on-year, double-digit growth during a crisis, which is in Gulf the whole region. Remarkable performance. And the good thing about this quarter that the growth is coming positively in all categories, all countries and all channels, which is a great result achieved by Almarai during this quarter. I'll elaborate for each of these 3 dimensions in the next slides. So let me move to the operating profit first. It's excellent to see again a green number, positive growth, 3% despite all the challenges we are facing of higher cost of feed importation, energy inflation in the region, transportation costs in general and ramp-up costs, mainly in the protein business. I'll touch base on that during the revenue section, Abdulhadi will elaborate on that when he talks about the financial performance. Net income is also positive year-on-year. The decline compared to operating profit is purely because of higher funding balance, which we're retaining because of water acquisition from last year. Let me now go through balance sheet and cash flow highlights, working capital. We're now exceeding SAR 5 billion in working capital. Virtually all of it is coming from inventory. Inventory is up by nearly SAR 1 billion, which is by choice, done knowingly. We're now carrying more than 106 days of stock on average. But this during the conflict has become a great source of stability and resilience for Almarai. And we will balance the number of days and we'll adjust as the conflict unwinds. Second is CapEx. You can see last quarter, we spent SAR 1 billion and this quarter is QAR 859 million. The reduction of SAR 143 million is consistent with the last 3 quarters. And you will see the same reduction going through for the next 4 or 5 quarters to come as well. I'll talk on that more when we talk of balance sheet at the end of the deck. Free cash flow looks very positive, SAR 1 billion plus. If you remember, in Q3 2025, Almarai bought the water business around SAR 1 billion. And the benefits of the current quarter is that it becomes normalized, we are free cash flow positive. And even though we are paying more in working capital, the reduction in CapEx allows us to report a positive free cash flow. If I can go to the next slide, where you will see the growth by each country. You can see the top 2 countries, KSA and Egypt, contributing more than SAR 100 million each by themselves. In total, Almarai is reporting more than SAR 635 million. Each country has their own different channel and product dynamics, but it's good to see positive number for every single one of the countries where we operate in. If I go through the same growth vector by product categories, I'll take a bit more time there, if you can go to Slide #10, please. First one, Fresh Dairy. After the adjustments done in May, you can see the Q3 number remained very positive, and we are very happy to see a normalized trading condition continued for the Fresh Dairy. Protein was another excellent quarter from a quantity point of view. Almarai produced 87 million birds, the same number of birds we did in Q2. So that growth, the added capacity is in full scope and is doing very well in distributing to the market. Fruit Juice, again, remarkable of 19%. I will take this time, Fruit Juice and Long Life Dairy. Virtually half the growth in both categories is coming from Egypt. And Egypt is doing very well in that respect in all 3 categories of yogurt, long-life dairy and juice. Egypt has done remarkably well, and that's where the growth is coming from. Bakery across the board is doing well, 13% growth in general. Gulf countries are growing stronger in bakery, which is fantastic. [indiscernible] itself is close to double-digit growth rate as well. With that said, that's a very high-level view of my products. Let me now move to channel. If you look at this graph, as you can see, traditional trade is more than 50% of our revenue. And you can see even the bigger channels are growing double-digit growth rate, 10% in traditional trade, modern trade, 14%; food service, 16%. Please note modern trade includes e-commerce. So within modern trade, there is mixed performance. But good thing to note is all 3 channels are working on full cylinder. Our export markets are doing fine as well, growing at 6%. And in total, Almarai growth of 11%, as you can see, is positive across all countries, products and channels. With that said, let me now request Abdulhadi to take us through the next section of our financial performance. Over to you, Abdulhadi.

Thank you, Ikram. Let me now move from the commercial momentum we have just discussed to the financial performance for the quarter. The key message is that the business continued to deliver strong top line growth, while the current cost environment has constrained the conversion of that growth into earnings. This bridge tells the earnings story for the quarter very clearly. We begin with net income of SAR 613 million in Q3 of last year. Pricing contributed SAR 191 million, while volume, mix and other factors added SAR 31 million. These gains demonstrate the underlying strength of the commercial performance, but they were substantially absorbed by higher cost of goods sold and operation expense. COGS was SAR 132 million of headwind and OpEx reduced earnings by SAR 68 million and funding and other items by another SAR 17 million. The result was net income of SAR 618 million, up SAR 5 million or 1%. The important message here is that the commercial engine is delivering strongly, but the benefits are currently being absorbed by the elevated cost environment. Taking a step back from the bridge, the quarter demonstrates the resilience of the underlying business. Revenue increased 11% to $6.18 billion, supported by strong performance across all markets, led by Saudi Arabia, Egypt and Kuwait [indiscernible] both in Fresh Dairy and Protein. Operating profit increased 8% to $779 million, despite pressure from energy, logistics and protein ramp-up costs. Net income reached $618 million, broadly in line with prior year and up $5 million. Taking a step back -- looking beneath the group results, the segment performance shows the different but complementary dynamics. Dairy just continue to provide a resilient foundation for the group. Revenue increased 10%, supported by healthy demand and strong market position. Profitability remained comparatively stable with an improved dairy revenue mix, helping to mitigate higher feed shipping costs. Bakery delivered another strong quarter, with revenue up 13% and net profit also showing strong growth. The performance reflects excellent commercial execution, improved product mix and continued operating discipline. [indiscernible] is an important growth engine. Revenue increased by 12% as additional capacity continues to come online. However, profitability remains under pressure from [indiscernible] market conditions, higher distribution costs related to ramp-up of new capacity. Protein expansion is clearly delivering the expected top line growth. The next phase is about improving utilization and converting that additional scale into stronger profitability. And now I'll hand it back over to Ikram.

[Foreign Language], Abdulhadi. Let's now go through the first 3 quarters of the year, the first 9 months. The shape of the results are very similar. So we'll go through it fairly fast to allow more time for Q&A. When you look at the first line of revenue, operating profit and net income, same trend you would observed into Q3 as well, double-digit growth rate on revenue, growth is very positive on all fronts, countries, channel, by product as well. Operating profit remains positive despite having very high transportation costs, energy costs and ramp-up cost. They are the 3 things affecting operating profit. And the net income is virtually flat year-on-year. Working capital is ramping up, as you can see in the bottom left-hand side, we're investing more in inventory to manage us through this critical part of the Iran conflict. CapEx is coming down as we have promised earlier, and we'll talk more on the full year basis as well. We are targeting less than $4 billion [Foreign Language] will get there as well. And free cash flow becomes very positive as we don't have the inorganic investment from last year. If I go to the next slide, I won't take much time here. The same story continues that the growth is very positive across the board. As you can see, [indiscernible], delivering more than $100 million in 3 digits across all categories. Qatar is doing well in percentage terms, but that's only because some categories in Bakery and Poultry have opened up, but it remains under delivered, where we're doing well on a percentage basis. We do the same thing if you go to the next slide by category, you will see protein taking the leads. The growth in Protein has now overtaken the growth in Fresh Dairy, which was the anchor [indiscernible]. So very good to see that we have now multiple sources of growth coming across. And you can see the diversity of Almarai portfolio, delivering growth across the board in multiple fronts. Water business looks positive, but I would like to highlight that this includes an inorganic growth rate. On a [indiscernible] basis, we are comparing 9 months versus 2 months. So this growth rate is inflated but we'll adjust it because it is the last quarter, after this quarter, growth will be a like-on-like basis. If we go on to the next channel, by channel growth rate, again, positive story across the board even for the first 9 months as well. And despite the Iran conflict, what we were witnessing, especially for food service in the Gulf, the sector and the food service tourism sector have remained strong, especially in the food categories. So good to see positive results on that front too. With that said, I'll pass on to Abdulhadi to take us through the financials for the first 9 months as well.

Thank you, Ikram. The year-to-date picture reinforces much of what we saw in Q3, strong underlying commercial conditions supported by capacity expansion and broad market execution along with the cost environment that moderated the translation of growth in revenue to bottom line growth. The year to date illustrates this dynamic very clearly. We started with net income of $1.9 billion. Net pricing generated $287 million of benefit, while volume mix and other factors contributed another $182 million. Together, those commercial factors represent a substantial positive contribution. However, they were offset by $172 million of [indiscernible], $231 million of additional OpEx, $28 million from funding and other items, together with $44 million from the [indiscernible] of the prior year Romania impairment reversal. This brings year-to-date net income to $1.986 billion, essentially in line with last year. The message here is that year-to-date is consistent with the quarter. Demand and revenue growth are strong. The opportunity ahead is to improve conversion. Looking at the 9 months financial performance as a whole, the strength of the top line performance remains evident. Revenue increased 10% to $18.21 billion, supported by board-based performance across all markets, along with continued capacity expansion and the integration of the water business. Operating profit increased 1% to $2.46 billion, while net income remained broadly stable at $1.986 billion. Finally, looking at the first 9 months by segment, the picture is broadly consistent with what we have seen in the third quarter. Dairy and Juice delivered resilient revenue growth across all markets with strong performance from Egypt. The segment continued to benefit from favorable dairy mix, although higher feed shipping costs remain [indiscernible]. Bakery remains a strong pro forma, revenue increased 8% while net profit grew 18%, supported by execution, mix optimization and continued operational excellence. Protein delivered 12% revenue growth as our expansion strategy continued to translate into additional sales. Profitability, however, remained below the prior year, reflecting competitive [indiscernible] market conditions and higher distribution and energy elevated costs. Our core businesses remain resilient and the growth investments are generating additional revenues. The priority now is to improve the returns generated from that top line growth. And now I'll hand it back to Ikram.

Thank you, Abdulhadi. Let us go through the other highlights for the quarter and for the year. Looking at CapEx, very pleased to see the onward trajectory. As we talked before, we have passed the peak of this investment cycle. As you can see on a trailing 12-month basis, we are today at 17% of our revenue. Just like you saw the graph in the history going backwards, you will see the same thing going forward as well. For the next 2 or 3 years, we expect this percentage to keep going down, [indiscernible] single digits. And you will see the same trend, we will elaborate in more detail during our Capital Markets Day on -- coming on this Thursday. If you go to the next slide, working capital. It goes through a temporary surge. And now we're having a working capital at around 22% of revenue. As we talked before, this is done by choice. We are comfortable with it. And as the [indiscernible], we'll be able to better manage it. If you go to the next slide, which is operating cash flow. Underlying operating cash flow remains very strong. I'll talk about it on the next slide. It's the adjustment in working capital that makes around 21%. And this will again turn back upwards when we manage the working capital after the contract. Interesting slide, on Slide 29, how Almarai has managed its cash over the last 12 months. The key part here is the first green bar on the chart, $5.9 billion. The underlying business continues to generate cash at a very healthy rate. We are already looking at nearly SAR 6 billion of underlying operating cash flow. This is getting in the short term, affected by the working capital adjustment, which has been driven by inventory. And that's why the last 12-month OCF was $5.1 billion. When you look at the CapEx, you can see already it's heading SAR 4 billion on a 12-month basis. Biological assets take up SAR 0.5 billion and a total of SAR 4.5 billion. Free cash flow is now looking at positive as we speak to therefor this quarter on a TTM basis. We expect that momentum to grow further in the next 3 or 4 quarters as well. And then you can see the borrowing funds from the bank to pay for our funding cost to the banks and dividend to our shareholders. If I keep going to the next slide, net debt trend. We're seeing the peak of the net debt leverage ratio as we speak today. As of September 2026, net debt-to-EBITDA is 2.72. In the next few quarters and years, you will see our EBITDA -- our operating cash flow grew gradually by SAR 300 million, SAR 400 million every single year. You will see our debt remaining constant or going down as well. And as a result, you will see this net debt trend coming down, just like you've seen the CapEx coming down over the last 2 or 3 quarters. If you look at EBITDA and EBIT margins, they are affected in the short term. This is as a result of the war. As you can see, we are growing top line very successfully. But the short -- the bottom line is affected temporarily because of what we're seeing in transportation costs and the fee costs. We are confident during the next 1 or 2 years, when the conflict unwinds, we'll be able to return the profitability back to the 14% to 15% range as we target in the long term. If we go to the next slide on debt maturity, we have already arranged all the funding available for the next one year. We are in talk with the banks and things are already signed up. So very comfortable regardless of what happens in the capital markets. Our funding is sorted for the next 12 months. And [Foreign Language], by the time we finish the year-end, we're targeting for the next 24 months as well. So we can see the challenges ahead with comfort in mind that we have no issues on liquidity, too. Next slide is about cash dividend, highlights that Almarai will pay its shareholder regardless of the trading conditions. And you can see the very strong history of Almarai through all the investment cycles, making sure the dividends keep on rising in life. With that, I would like to request our CEO, Mr. Fawaz Al-Jasser, to take us through the final slides of the deck and the key takeaways for the quarter. Mr. Fawaz Al-Jasser, over to you.

Thank you, Ikram. [Foreign Language] Despite everything happening in the region, demand remains strong. Almarai continues to grow. We delivered double-digit growth across all the segments, geography and channel. But we still have a challenge, a challenge of the [indiscernible] 3 markets. We are building our inventory to make sure that our products remain available on the shelf. Supply is not affected. This shows how resilient we are. But that comes with the costs. Profitability remains [indiscernible], hopefully in the short term, but mainly due to the current situation.

Thank you very much, Mr. Fawaz. With that said, let us go to the last slide, and we'll open the floor for Q&A. If you can ask AlJazira Capital to open the session, and we're happy to take questions [indiscernible]. Over to you, Abdulhadi.

Yes. Thank you, Sir Fawaz and Mr. Ikram. Fahad Irfan, you can please take us through the Q&A.

[Operator Instructions] Our first question today comes from the line of [indiscernible].

Congrats management, and thank you for a great presentation. I have 2 questions from my end. The first one is regarding Bakery segment. The performance was quite strong this quarter. It's -- it's the same margin despite the higher production costs. So what is the driver behind this growth?

It's a volume-led growth, and we have done pricing adjustment recently in Q2 and Q3 as well, and that's the benefit coming through. So -- and as I said in the presentation as well, we're seeing growth in the Gulf markets much stronger than KSA as well. It's a mix issue. We're doing very well on bread. We have no issues on that one. But in terms of treats, which is the cakes category, this is where we are having a mix issue. So some sectors are growing very strongly, very comfortable on bread and buns. But in terms of some of the cakes and other product categories, we are facing some pressure. Other thing, wastage has been doing very well in this sector. We are running much lower than our yearly averages less than 3% to 2%. And it is giving us another greater benefit to our P&L.

Okay. Great. For the second question is on the other activities, we saw larger losses by around SAR 40 million. It's more than the same quarter last year. Can you give us more color of what's happening in the segment?

Yes. The other sectors, look, it includes water. And again, this is the inorganic acquisition, which is getting clubbed into that sector. I would recommend that from next quarter onwards, you will have a proper like-for-like comparison. And on top of it, what we are facing in other segment is [indiscernible] are more trading in nature. Given what's happening in the region and given what's happening with alfalfa, Almarai is trying to sell a lot of products within U.S.A. and Argentina as well. And that's resulting in some short-term losses because we're selling crops in the same countries as well. And that's the reason for this temporary blip in the other sector.

Our next question comes from the line of Mr. Abdullah Al Buraidi.

Thank you very much for the great presentation and congrats on the strategy and the results. Just a follow-up on the question regarding the other activities. Could you quantify the losses that is coming from [indiscernible] because even looking at the cash flow statement, there is an inventory or account receivables, I don't know which is which, a loss of around SAR 27 million, which might be one-off. The other thing is that we are noticing that the selling and distribution expenses, it is growing year-over-year, similar to the last quarter. And it is eating away whatever contribution margin that is being added. If we go to the net income bridge, we noticed the increase in net pricing is SAR 190 million and the increase in cost of revenues around SAR 130 million. So that there's a SAR 60 million netting on gross profits, but that is eating away by higher S&D expenses. And regarding energy, we know that the big bulk of it is in the cost of revenue. So could you elaborate on what is happening with [indiscernible]?

Abdullah, you've gone through the whole financial statement questions. It's interesting how you have constructed the question. I'll try to answer that. I think it covers a lot of them, but let me go through one by one. If I forget to remind me of the question again, please. Look, I'll start with the one. We don't give details on the [indiscernible] and subchannels. And the reason is, again, you see a lot of temporary difference because of the accounting of the crops, which happens at each country at a different level. You missed by 2 or 3 days on the crops already. You have a very big volatility in the P&L. The reference you made to the inventory issue, the SAR 27 million. In the cash flow statement, you're absolutely right. It's up by SAR 27 million from Q2. This is higher provisions we are taking. It's actually the signings of the [indiscernible] if you noticed. So Almarai is taking higher provision in inventory, and that's not because of [indiscernible]. That's because we are getting more inventory within Saudi Arabia. I talked about SAR 1 billion of extra inventory as well. And some of the inventory comes with a higher risk, and we have automatic systems by which we are forced to take higher inventory provision because of expected losses because of dryness, because of water damage at the bottom of the pallets. So those things as a result of that. There is no change in debtors, as you can see on the top of the P&L in the main P&L section. So this is inventory, and this is coming from the Saudi Arabian inventory health, and that's because of the increase in inventory. So that's your first question. Your second question was about S&D costs. To sell 11% growth rate volume, you can imagine how much volume we are pushing through, how much extra trucks and vans we are carrying. On top of it, the extra expense we are carrying for diesel especially in the UAE, where we have seen at least 2 or 3 price increases during the year. That's also hitting the S&D. So I think with all the efficiency, I think Almarai is doing very well to keep S&D costs in line with revenue because we're seeing a lot of pressures on the underlying, let's say, the cost factors as well. You may have some other questions, which I might have forgotten, but please [indiscernible]

Diesel?

Diesel cost?. Look, diesel cost affect both lines. Diesel costs will affect S&D. So in some of our factories, we are using diesel as an alternative for electricity. Not all of our factories are connected to the grid. So the impact of the diesel affect both parts. It affects the COGS line. affects the S&D line as well. The -- I would say, the refer from the factory all the way to the depot, it's covered in COGS. But all the vans that you see on the street every single day, the diesel used in those are affected from the S&D costs. And this is why we're on the talk of UAE and other countries, that's where the S&D cost is going up as well.

Yes, that covers it all, and it's quite informative. Just as a confirmation, would you quantify that the one-offs regarding the inventory provision and the losses that is coming from crops to be around SAR 40 million this quarter or close to this?

No, I don't think so, no. Look, as I said again, the accounting for crops is different. They're ready for sale. So what happens, I don't want to go to an accounting session, but especially in those countries, we are using crops for both reasons, using crops for sale in the market as well. We are using crops to be distributed internally to Almarai as well. So they just follow, you will have huge swings between the quarters. And that's why we always manage it in the sense that we keep it in other categories. It distorts the profitability up and down. So yes, that's the reason.

Our next question comes from Rashad Kawan.

A couple for me, please. Ikram, I think if I take you back to the Q2 conference call, you had said that if things remain where they are, you expected that the pricing action you took in Fresh Dairy, in particular, would result in net income growth year-over-year, I think, in the back half of the year. Now clearly, circumstances have changed. I think the escalation we've seen in the Red Sea, no doubt added to the cost headwinds you had already been seeing. Some of the feedstock raw materials have also been moving higher over the last couple of months when I look at corn or soybean as an example. So I think all things considered, it definitely seems a fantastic outcome that earnings are stable year-over-year despite all these headwinds. I guess the natural question from here, though, as you look into Q4 and especially into next year with diesel prices potentially being another swing factor, how are you thinking about the balance of protecting margins versus passing pricing on to the consumer? Would you consider taking, I guess, more aggressive pricing action given how well the price increases across the board have been taken domestically in Saudi and the fact that consumption overall has been quite resilient despite all the uncertainty?

Rashad, a very good question. You're reading my mind. So said -- look, we talk -- I think all of us, including you, me and the people on the call as well, we were optimistic about the conflict finishing soon as well. If you remember, there was a lot of news at that time that the war will finish around June time, and we will all go back to at least within a few months or quarters to a normalized situation. The escalation has continued unfortunately. And as we speak today, that's gotten worse. So I don't have something in mind that how this conflict finished. If we hear to the U.S. side, I would say the end of the year is a reasonable assumption. Somebody has to take a call on that, let's say, from a financial point of view. End of the year sounds a reasonable assumption for the conflict to finish, even if it takes 2 or 3 quarters extra to get to a normalized position. But as you rightly said, if the contract continued further and it has continued, if it kept on going, the cost impact on all the dairy companies, and I would say all the food companies in the region in Saudi Arabia would be significant. We will face quite significant headwinds in terms of elevated cost of importation of food. This is something that Almarai will make a decision, and it will employ everything available in its parcel. We will look at all options. Our first option is always about management of costs. We have to look internally first. And we have to make sure we are doing everything we can to reduce the cost. And then, of course, pricing remains an option. It's not the first choice by default, but it will remain an option. And for example, if the work continues for another 2 or 3 quarters, then we will have to make a call and perhaps pricing would be initiated. But as I said, it's not the first choice as we speak to it.

Okay. That's clear. And then second question, if I can, about -- on Poultry. I think you had said that you were seeing some improvement in the promotional dynamics in Q1 and particularly in Q2, probably helped by the conflict adding cost headwinds to importers, et cetera. that seems to have changed based on the commentary on this call and looking at the results in Poultry in terms of profitability. Can you talk us through what you're seeing and expectations through the rest of the year in terms of promotional intensity and pricing there? .

It has remained at the same level. I was expecting -- we saw -- as you rightly said, I think the bottom was the Q4 last year, Q1 was better than Q4. Q2 was better than Q1. And I would have loved to report that Q3 has become better than Q2, but it hasn't. We still see a lot of promotional activities within the poultry segment across the board. The discounting has continued. Happy to report similar, I would say, EBIT margins as we did in Q2. But of course, I would have liked to see the trend going further up as well. This is something we haven't seen, at least for the last 4 or 5 weeks, but never a discounting by one of the players will come down and other player will ramp up the pressure as well. So local market is seeing a lot of discounting as well.

Our next question comes from the line of Mohammed Saad.

This Mohammed Saad from [indiscernible] Capital. I just have a couple of questions. My first question is with regards to Egypt. You have seen a phenomenal revenue growth in Egypt. So I would love to hear from you what's going on, on the ground what is driving this revenue growth? Is it price? Is it some promotional activities? Is it volume? And the growth in revenue that is coming in from Egypt, is it -- does that have the same net margin effectively? Or are you giving out some heavy promotions to push through your volumes? That's my first question. My second question is about Long Life Milk segment. We saw some pricing in the Fresh Dairy, but up till now, despite increase in skim milk powder prices, we have not seen any improvement in pricing in the Long Life. Any color you can give on when we can see if we can see such an increase in price? And lastly, we have seen in the SAR 132 million cost, the impact of -- I'm assuming it includes the impact of both logistics and the impact of higher alfalfa. To what extent is the impact of higher alfalfa costs already being incorporated in SAR 132 million incremental increase in cost? Or should we expect further increase in cost of goods sold? These are my 3 questions.