The National Agricultural Development Company (NADEC), a leading food and agriculture company in Saudi Arabia, announced a 49% decline in its net annual profit for 2025, reaching SAR 393.35 million, compared to SAR 774.63 million in 2024. In its official statement on the Saudi Stock Exchange (Tadawul) website, the company explained that this decline is primarily due to the recording of exceptional, non-recurring profits during the past year, making the annual comparison unrepresentative of the company's actual operating performance, which witnessed significant revenue growth.
General context and impact of non-recurring profits
Founded in 1981 as part of the Kingdom’s efforts to achieve food security, Nadec is today one of the largest integrated agri-food companies in the Middle East and North Africa region. The company plays a pivotal role in supporting the objectives of Saudi Vision 2030 related to economic diversification and boosting local production. Analysis of its financial results comes within a global economic context marked by fluctuations in production costs and supply chains.
The most significant factor in the decline in net profit was the one-off gain of SAR 356.51 million recorded in 2024. This gain resulted from the initial public offering of 30% of the shares of Arabian Flour Mills Company for Food Products, from which NADEC realized capital gains, in addition to unrealized gains from the revaluation of the fair value of the remaining investment. Excluding this exceptional item presents a more realistic picture of the company's operating performance.
Operational performance analysis: Revenue growth in the face of rising costs
Despite a decrease in net profit, the operating results showed significant positive aspects. The company's revenue increased by 9.52% during 2025, primarily driven by sales growth in the protein and agriculture sectors, along with a slight increase in dairy sales of 0.30%. This growth reflects the strength of the Nadec brand and its ability to meet increasing demand in the local and regional markets.
Conversely, the company faced challenges in the form of rising operating costs. The cost of sales as a percentage of revenue increased by 3.53% due to changes in the product mix and higher production costs. Selling and marketing expenses also rose by 8.40% as a result of increased distribution costs. Furthermore, the company recorded a loss of SAR 4.76 million from its share in a joint venture, compared to a profit of SAR 24.04 million in the previous year.
Positive indicators and future impact
Several other factors supported the company's financial performance. Treasury income rose by 10.57% thanks to increased returns on bank deposits. The company also benefited from government incentives of SAR 6 million from the Saudi Export Development Authority and realized profits of SAR 14.56 million from asset sales. Zakat expense decreased by SAR 9 million, which helped alleviate pressure on net profit.
Nadec's results are a key indicator for investors in the Saudi financial market, demonstrating that revenue growth is the primary measure of a company's operational health, while understanding net profit requires a deeper analysis of non-recurring bank balances. The company is expected to continue focusing on improving operational efficiency and diversifying its product portfolio to address cost challenges and maintain a sustainable growth trajectory, serving its strategic objectives and the interests of its shareholders.
