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AGRICULTURE & FOOD INDUSTRIESSaudi Dairy & FoodstuffPricePricing / Valuation as on May 27, 2009Mkt capSh. outstandingKey statisticsSR27.5SR0.9bn ($238.7mn)32.5mn52 week range H/L (SR) 43.8/15.7Avg daily turnover (mn) SR US$3m 11.33 3.0212m 17.66 4.72Raw Beta 6m 3yr0.86 1.24ReutersBloomberg2270.SESADAFCO ABPrice perform (%) 1M 3M 12MAbsolute (%) 1 45 (21)Market (%) 6 32 (39)Sector (%) 4 21 (22)Website: www.sadafco.comValuation multiples2007 2008 2009P/E (x) 43.1 10.1 27.3P/B (x) 3.1 1.1 1.6P/Sales (x) 2.0 0.6 0.8Div yield (%) 2.2 8.6 0.0Weightage (%)TASI (free float weight) 0.12MSCI Saudi (domestic)N/AFree float (%)Free float 58.21Relative share price perf.11,0009,0007,0005,0003,000M ay-08 Sep-08 Jan-09 M ay-09TASITop 5 shareholders (%)5040302010-SADAFCO (RHS)United Industries Company 30.1Al Samih Trading Company 11.6Global Investment House 8.9Source: NCBC ResearchJeddah-based Saudia Dairy & Foodstuff Company (SADAFCO) commencedoperations in 1977 focusing on dairy products. The company later diversified itsproduct line by entering into joint ventures with food companies. SADAFCO nowhas a portfolio comprising more than 100 products sold under the SAUDIA brand.Company financials2006 2007 2008 2009YoY(%)CAGR(%)(06-09)Net Revenues SRmn 825 769 878 922 5.0 3.8EBITDA SRmn 52 93 104 102 (2.3) 24.8Net Income SRmn (25) 35 56 29 (48.9) NMAssets SRmn 770 732 764 711 (6.9) (2.6)Equity SRmn 455 488 515 502 (2.4) 3.3Total Debt SRmn 139 22 6 1 (80.2) (79.2)Cash & Equiv SRmn 60 105 83 50 (39.8) (5.9)EBITDA Mgn % 6.3 12.2 11.9 11.0 - -Net Mgn % (3.0) 4.5 6.4 3.1 - -ROE % (5.0) 7.4 11.2 5.6 - -ROA % (3.0) 4.6 7.5 3.9 - -Div Payout % - 93.2 87.0 0.0 - -EPS SR (0.8) 1.1 1.7 0.9 (48.9) NMBVPS SR 14.0 15.0 15.8 15.5 (2.4) 3.3Source: Company, NCBC ResearchSegment-wise business analysisProduct segment 2008 Geographic 2008%Rev % Net Inc Breakup %Rev % Net IncLong Shelf Life UHT 69.8 GCC 100.0 100.0Ice-creams 8.9Tomato paste 7.3Cheeses 5.6Juices & Flavored Milk 5.2Snacks & Canned Peas/beans 2.9Other Dressings 0.4Source: Company, NCBC Research• Business brief: The company operates through five main segments—milk, juices,snacks, ice cream, and other foodstuffs. Under the milk segment, SADAFCO offerscustomers a wide range of milk packs and milk shakes. The ice cream segment sellsa number of ice cream flavors, while the snacks segment includes a few types ofcrispies. The other foodstuffs segment produces tomato paste and hummus.• Financials: SADAFCO‘s revenue grew 5.0% on y-o-y basis to SR922.3mn for theyear ended March 2009. However, the company’s EBITDA margin declined to 11.0%as rise in cost of sales and administrative expenses surpassed the revenue growth.Net profit declined 48.9% y-o-y to SR28.7mn in FY09. The fall in the net income wasmainly due to increase in cost of sales, administrative expenses as well as the losseson investment income.• Recent developments: In April 2008, the company sold land in Riyadh for SR20mn,making a profit of SR15.4mn.JUNE 2009SAUDI DAIRY & FOODSTUFF168