Fourth Milling Lifts Nine-Month Profit 15% to 159.8M SAR

Riyadh, Saudi Arabia — Fourth Milling Company posted a net profit of 159.8 million SAR for the nine months ending September 30, 2026, up 15% from 138.9 million SAR in the same period last year. Revenue climbed 12.6% to 527.9 million SAR, driven by stronger volumes and higher prices in bran and animal feed. Gross profit surged 22.1% to 260 million SAR, reflecting disciplined margin management and a growing share of value-added products.

The results signal consistent momentum. Each of the three quarters delivered sequential profit growth, with the company converting higher sales into meaningfully wider margins throughout the period.

Q3 2026: The Strongest Quarter Yet

Fourth Milling earned 55.9 million SAR in net profit during Q3 2026, up 7.2% from 52.1 million SAR in Q3 2025 and up 10.6% from 50.6 million SAR in Q2 2026. Quarterly revenue reached 184.8 million SAR, a 12.1% year-on-year increase and a 10.1% sequential rise. Gross profit hit 90.5 million SAR, pushing the gross margin to 49% — three percentage points above the 46% recorded in Q3 2025. Operational profit came in at 59.3 million SAR, up 11.8% year-on-year.

The sequential improvement from Q2 was broad-based. Flour volumes grew 8%, animal feed volumes jumped 58%, and higher prices for bran and animal feed sustained revenue momentum. Bran volumes slipped slightly by 2%, though higher bran prices offset the volume dip.

Key Drivers

• Animal feed surge: Animal feed volumes rose 53.8% year-on-year in Q3, the standout growth engine of the quarter.
• Bran strength: Bran volumes grew 9.8% year-on-year in Q3, with price gains adding further lift.
• Margin expansion: The nine-month gross margin widened significantly, with gross profit up 22.1% against revenue growth of 12.6%.
• Value-added focus: Management’s strategic shift toward higher-margin product categories is visibly flowing through to the bottom line.
• Cost headwinds: Higher personnel costs pushed general and administrative expenses up, and selling and distribution expenses rose in line with expanded commercial activity.
• Presentation change: Transportation costs of 10.5 million SAR were reclassified from revenue deductions to selling expenses for the current period. This makes the year-on-year revenue comparison appear larger than the underlying volume and price change alone.

What This Means for Investors

• Earnings quality is solid. The 15% net profit growth outpaced revenue growth of 12.6%, confirming genuine margin improvement rather than just top-line expansion.
• The reclassification matters. Moving 10.5 million SAR of transportation costs out of revenue and into expenses inflates the reported revenue growth figure. Strip that out and underlying growth is still healthy — but investors should benchmark accordingly.
• Shareholders’ equity reached 813.9 million SAR, up 11% year-on-year, suggesting the business is retaining earnings effectively and building a stronger balance sheet.
• Earnings per share of 0.30 SAR for the nine months compares to 0.26 SAR in the prior-year period — a concrete 15.4% gain per share that directly rewards shareholders.

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THE SAUDI STANDARD’S VIEW: FOURTH MILLING’S MARGIN STORY IS THE REAL HEADLINE

Fourth Milling’s nine-month results are not simply a volume story — they represent a disciplined execution of a higher-margin product strategy that is translating directly into shareholder value. With gross profit expanding more than twice as fast as revenue, the company is demonstrating the kind of earnings quality that long-term investors should take seriously in the Saudi food and agribusiness sector.

• MARGIN EXPANSION SIGNALS STRUCTURAL IMPROVEMENT

A gross margin of 49% in Q3 2026 — up three percentage points year-on-year — indicates that Fourth Milling is not merely riding favorable market conditions but actively improving its product mix. Companies that consistently widen margins while growing revenue are demonstrating operational leverage, a quality that commands a premium valuation over time. Investors should view this trajectory as evidence of management capability, not cyclical luck.

• ANIMAL FEED GROWTH IS A STRATEGIC ASSET

A 53.8% year-on-year surge in animal feed volumes in Q3 alone elevates this segment from a secondary revenue line to a core growth engine. As Saudi Arabia accelerates domestic food production under its food security agenda, demand for animal feed is structurally supported by the expansion of livestock, poultry, and aquaculture industries nationwide. Fourth Milling’s positioning in this segment gives it direct exposure to one of the Kingdom’s most policy-backed agricultural priorities.

• BALANCE SHEET STRENGTH ADDS INVESTOR CONFIDENCE

Shareholders’ equity reaching 813.9 million SAR — an 11% year-on-year increase — confirms that the company is retaining earnings effectively rather than distributing beyond its means. A strengthening balance sheet provides the financial foundation for future capacity investments, potential acquisitions, or sustained dividend capacity. For income-oriented investors, this trajectory matters as much as the profit figures themselves.

• THE RECLASSIFICATION REQUIRES CAREFUL BENCHMARKING

The reclassification of 10.5 million SAR in transportation costs from revenue deductions to selling expenses means that headline revenue growth of 12.6% overstates the true underlying commercial expansion. Sophisticated investors should adjust their year-on-year comparisons accordingly when modeling future revenue trajectories. The core business remains healthy on an adjusted basis, but precision in financial analysis is essential when evaluating this name against sector peers.

Fourth Milling’s results align with the broader ambitions of Vision 2030’s food security pillar, which seeks to reduce Saudi Arabia’s dependence on imported food commodities by building resilient, efficient domestic processing capacity. A milling company that expands animal feed volumes, widens margins, and strengthens its balance sheet simultaneously is precisely the kind of industrial operator that Vision 2030’s agricultural transformation is designed to cultivate. For investors seeking exposure to Saudi Arabia’s non-oil economic diversification, Fourth Milling’s consistent execution makes it a name worth watching closely.