Tanmiah Achieves 8.0% Revenue Growth Amid Challenging Market in Q1 2026
Riyadh, Saudi Arabia – Tanmiah Food Company, a prominent player in the Middle East’s food sector, reported an 8.0% year-on-year revenue growth for the first quarter of 2026, reaching SAR 731.2 million. This performance reflects resilience in the Agribusiness and Restaurant Operations segments, despite ongoing market challenges, seasonality, and geopolitical tensions.
Revenue Growth Driven by Agribusiness and Restaurant Operations
The company’s revenue growth was primarily fueled by a 5.6% increase in the Agribusiness sector and a remarkable 42.2% surge in Restaurant Operations. The Fresh Poultry segment saw total sales volume rise to 43.2 million birds, marking an 8.6% increase compared to the previous year. Average daily production during this period reached 604,000 birds.
Tanmiah has also been ramping up production at new facilities, adding six farms to enhance capacity utilization. The company remains on track for the commissioning of a new mega hatchery and feed mill in the second half of 2026.
Financial Performance and Challenges
Despite the revenue increase, Tanmiah’s gross profit and EBITDA were adversely affected by higher input costs and declining revenues in certain segments of the Animal Feed and Health business. Gross profit stood at SAR 166.8 million, with a gross margin of 22.8%. EBITDA fell by 5.9% year-on-year to SAR 88.5 million, resulting in an EBITDA margin contraction to 12.1% from 13.9%.
The company’s profitability also declined, with net losses attributed to rising diesel and utility costs, increased distribution expenses, and elevated financing costs associated with new assets and stores.
Strategic Initiatives and Future Outlook
Zulfiqar Hamadani, CEO of Tanmiah Group, emphasized the company’s disciplined execution in navigating a challenging external environment. He noted that the diversified platform and proactive strategies have allowed Tanmiah to maintain operational continuity and secure critical inputs, leading to solid revenue growth across both Agribusiness and Restaurant Operations.
The company is focused on maximizing returns from recent investments and enhancing food security in Saudi Arabia. Strategic priorities include optimizing the asset base, advancing operational efficiency, and driving cost efficiencies.
Segmental Revenue Analysis
The Agribusiness segment, which includes Fresh Poultry and Animal Feed and Health Products, accounted for approximately 92% of total revenue in Q1 2026. Fresh Poultry revenue increased by 10.4% year-on-year to SAR 551.9 million, supported by higher volumes and improved average selling prices. Conversely, the Animal Feed and Health Products segment experienced a 12.3% decline in revenue to SAR 117.4 million due to softer market conditions.
In the Restaurant Operations segment, revenue surged by 42.2% to SAR 61.9 million, driven by successful marketing campaigns that boosted in-store transactions. As of March 31, 2026, Tanmiah operated a total of 94 outlets, including 85 in Saudi Arabia, four in Bahrain, and five in Kuwait.
Cost of Sales and Capital Expenditure
Cost of sales rose by 10.9% year-on-year to SAR 564.4 million, reflecting increased fuel, utility, and logistics costs, along with higher depreciation from newly commissioned facilities. Gross profit declined by 1.0% year-on-year, leading to a contraction in gross margin.
Capital expenditure for Q1 2026 amounted to SAR 37.4 million, a significant decrease of 81.6% year-on-year, as the company shifts focus from peak capital expenditures to optimizing utilization and generating returns from recently commissioned assets.
Commitment to Sustainability
Tanmiah continues to advance its sustainability initiatives, aligning with the Kingdom’s Vision 2030 and the United Nations Sustainable Development Goals. The company is executing a comprehensive portfolio of sustainability projects with an estimated total EBITDA impact of approximately SAR 100 million.
The decarbonization program is progressing, with diesel-to-LPG conversions underway for incinerators and boilers. The Haradh solar project is on track for completion in July 2026, and additional solar sites have received approval.
For more information, visit www.tanmiah.com.
Source: www.zawya.com
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Published on 2026-05-10 16:23:00 • By the Editorial Desk
