Jeddah, Saudi Arabia – 31 October 2023: First Milling Company (“the Company”, or “First Mills”), a market-leading Saudi milling company, today announced its financial performance for the first nine months (“9M”) and third quarter (“Q3”) of 2023.

Commenting on the financial results, Abdullah Ababtain, Chief Executive Officer of First Mills, said, 
'First Mills delivered a solid set of results for the first nine months of 2023G, in spite of the challenging market environment. Our core business is diversified and robust, and we are actively improving efficiencies to expand margins. 
Our downstream businesses that we continue developing will start boosting in the last quarter of 2023G such as the launch of our PESA Mill and Mixing Plant, with more to come in 2024G from the commissioning of our Durum Mill and Mill-C Upgrade. 
Our stable revenues, double digit margins, and clear growth path tell me that First Mills is on the right track towards long term value creation for our shareholders and all related stakeholders.”

FINANCIALS: SOLID TOPLINE GROWTH AND DOUBLE-DIGIT MARGINS  
First Mills achieved a 4.5% year-on-year (YoY) revenue growth in 9M 2023G, generating SAR 718 million. This topline growth is attributed to its largest product segment, flour, growing by 8% in compared to last year, supported by 7% growth in bran revenue, reflecting the Company’s successes in acquiring new customers and increasing its geographic coverage. Even in Q3 2023G, revenue grew 4.3% YoY driven by the net revenue growth in flour by 10% and feed by 16%. However, Q3 2023G bran revenue declined 30% YoY due to prioritizing the increase of intake in the feed production driven by the feed growth. First Mills’ Q3 2023G capacity utilization was 97.2%, increasing by 7% compared to the same period of last year.
The Company closed 9M 2023G with gross profit of SAR 308.5 million, flat over the same period last year reflecting robust business performance. Net profit for 9M 2023G was SAR 162.7 million and for Q3 2023G was SAR 54 million, declining 17.5% and 14.9% YoY, respectively. This change was driven by the application of the financing costs related to the long-term financing arrangement that was part of the merger with the parent company 'Al Raha Al Safi” and began being recorded in the Company’s books on 15 September 2022G. Excluding the impact of interest cost, the like-for-like profit is in line with the same period last year. Moreover, the Company has identified growing demand for its products in new geographical areas, and as such has increased its selling and distribution costs to accommodate this increased demand. However, operating expenses maintained the same levels as previous periods as a result of re-adjusting and managing general, administrative and other expenses.
Despite that, 9M 2023G and Q3 2023G net profit margin were 22.7% and 21.8%, respectively, reflecting a healthy bottom-line financial performance. 

OPERATIONS: DIVERSIFIED PRODUCT PORTFOLIO AND GEOGRAPHIC REACH POSITIONED FOR GROWTH ESPECIALLY IN DOWNSTREAM SEGMENTS

First Mills gains from both its diversified product portfolio and geographic presence covering all major regions of the Kingdom. The Company produces flour and bran from its Jeddah, Qassim, Tabuk, and Al Ahsa plants, and produces feed from its Jeddah and Qassim plants.   
The Company expects promising upside from two significant avenues. Firstly, for its core business, by optimizing cost and production dynamics to achieve economies of scale as its geographic reach and product diversification enable this ambition. Secondly, its further expansion into new downstream business segments that should start contributing yield growth and increase the Company's market share, as such, require Capex and Opex support. 

Specifically, the Company is actively working on four projects that will drive this expansion of its Aloula retail brand as per the table below:

SHAREHOLDER VALUE: STRONG CASH GENERATION AND ROBUST CAPEX SUPPORT SUSTAINABLE VALUE CREATION FOR SHAREHOLDERS
In Q3 2023G, First Mills generated a robust Free Cash Flow (FCF*) of SAR 188 million with an FCF Conversion Rate of 76%, reflecting the Company’s ability to efficiently allocate capital and optimize cash flow from its core business. Moreover, the strategic increase in CAPEX to SAR 72 million in 9M 2023G provides a solid foundation towards its downstream expansion aspirations.