Preliminary Report .. NADEC Results for Q2 2026

Item

Current Period

Comparable Period of Previous Year

Change%

Sales/Revenues

1,794.3

1,841.92

-2.585

Gross Profit (Loss)

531.89

638.91

-16.75

Operating Profit (Loss)

176.26

208.77

-15.572

Net Profit (Loss) Attributable to Shareholders of the Issuer

158.27

218.68

-27.624

Total Comprehensive Income Attributable to Shareholders of the Issuer

208.05

180.8

15.071

Total Equity (After Deducting Non-Controlling Interests)

4,816.21

4,456.52

8.071

Earnings (Loss) Per Share

0.53

0.72

All amounts in (millions) Saudi Riyals

Item

Value

Percentage of Capital

Gains (Losses) from Change in Fair Value of Investment Properties

Accumulated Losses

All amounts in (millions) Saudi Riyals

Item

Explanation

The reason for the increase (decrease) in sales/revenues during the current quarter compared to the comparable quarter of the previous year

The company's total revenues for the current quarter amounted to 876.44 million Saudi Riyals compared to 830.47 million Saudi Riyals for the comparable quarter of the previous year, an increase of 5.54%. This increase is mainly due to the growth in sales of the protein and agriculture sectors by 99.19% and 40.99%, respectively, as the company continues to invest in strategic food sectors with long-term commercial importance. The growth in the protein and agriculture sectors helped mitigate the impact of the decline in sales of the dairy and food manufacturing sector by 3.67%.

The reason for the increase (decrease) in net profit during the current quarter compared to the comparable quarter of the previous year

The company's net profit for the current quarter amounted to 64.56 million Saudi Riyals, compared to a net profit of 115.26 million Saudi Riyals for the comparable quarter of the previous year, a decrease of 43.99%. The decrease is mainly due to the following factors:

- Cost of sales:

The cost of sales to revenues ratio increased during the current quarter by 9.24% compared to the comparable quarter of the previous year, mainly due to an exceptional increase in feed costs, shipping, and surcharges associated with regional maritime disruptions. The financial impact of this cost increase amounted to 45 million Saudi Riyals during the current quarter. Management expects these exceptional cost pressures to subside as the regional operating environment returns to normal.

- Selling and marketing expenses:

Selling and marketing expenses increased by 5.42% compared to the comparable quarter of the previous year, mainly due to higher distribution costs.

- Other expenses:

Other expenses increased by 7.84 million Saudi Riyals compared to the comparable quarter of the previous year, mainly due to higher losses on the sale of biological assets.

- Treasury income:

Treasury income decreased by 9.19 million Saudi Riyals compared to the comparable quarter of the previous year, mainly due to lower income from Murabaha deposits with banks.

- Share in results of a joint venture:

During the current quarter, the company recognized losses of 9.12 million Saudi Riyals representing its share in the losses of the investment in the joint venture (Al-Ra'i National Livestock Company) for its financial results for 2025 and the first half of 2026, compared to 0.50 million Saudi Riyals for the comparable quarter of the previous year. In addition, on May 3, 2026, the company announced the signing of a share purchase agreement with Saudi Anam Trading Company to purchase its entire 49% stake in Al-Ra'i National Livestock Company. The transaction is subject to the fulfillment of necessary regulatory and contractual conditions and approvals, thereby increasing NADEC's ownership in Al-Ra'i National Livestock Company to 100%.

The impact of the aforementioned factors was partially offset by the following positive items:

- Revenues

The company's total revenues for the current quarter amounted to 876.44 million Saudi Riyals compared to 830.47 million Saudi Riyals for the comparable quarter of the previous year, an increase of 5.54%. This is mainly due to the growth in sales of the protein and agriculture sectors by 99.19% and 40.99%, respectively. The growth in these strategic value-added sectors partially mitigated the impact of the decline in sales of the dairy and food manufacturing sector.

- Reversal of impairment losses on trade receivables and other debit balances:

During the current quarter, the company recorded a non-recurring gain of 32.84 million Saudi Riyals resulting from the reversal of impairment losses related to old debit balances that were collected during the current quarter.

- Other revenues:

Other revenues increased by 9.16 million Saudi Riyals compared to the comparable quarter of the previous year, mainly due to higher dividends and scrap sales.

As a result of the aforementioned factors, gross profit and operating profit were affected as follows:

- Gross profit:

Gross profit for the current quarter amounted to 249.52 million Saudi Riyals compared to 313.16 million Saudi Riyals for the comparable quarter of the previous year, a decrease of 20.32%, mainly due to external cost pressures that led to a 9.24% increase in the cost of sales to revenues ratio. These pressures were mainly driven by exceptional increases in animal feed costs, shipping costs, and war risk surcharges related to regional maritime disruptions.

- Operating profit:

Operating profit for the current quarter amounted to 78.64 million Saudi Riyals compared to 109.49 million Saudi Riyals for the comparable quarter of the previous year, a decrease of 28.18%, mainly due to the higher cost of sales to revenues ratio and higher selling and marketing expenses, partially offset by higher revenues.

The reason for the increase (decrease) in sales/revenues during the current quarter compared to the previous quarter

The company's total revenues for the current quarter amounted to 876.44 million Saudi Riyals compared to 917.86 million Saudi Riyals for the previous quarter, a decrease of 4.51% (first quarter of 2026), mainly due to a decline in sales of the dairy and food manufacturing sector and the protein sector, partially offset by higher sales in the agriculture sector. Since the holy month of Ramadan and Eid al-Fitr fell in the first quarter of 2026, a period in which NADEC historically records higher sales, the quarter-on-quarter decline in the second quarter aligns with usual seasonal patterns.

The reason for the increase (decrease) in net profit during the current quarter compared to the previous quarter

The company's net profit for the current quarter amounted to 64.56 million Saudi Riyals, compared to a net profit of 93.71 million Saudi Riyals for the previous quarter, a decrease of 31.11%. The decrease is mainly due to the following factors:

- Revenues:

The company's total revenues for the current quarter amounted to 876.44 million Saudi Riyals compared to 917.86 million Saudi Riyals for the previous quarter (first quarter of 2026), a decrease of 4.51%, mainly due to a decline in sales of the dairy and food manufacturing sector and the protein sector, partially offset by higher sales in the agriculture sector.

- Cost of sales: