Tanmiah Achieves 8.0% Revenue Growth in Q1 2026 Amid Market Challenges
In the first quarter of 2026, Tanmiah Food Company reported an 8.0% year-on-year revenue growth, reaching SAR 731.2 million. This achievement is particularly noteworthy given the ongoing challenges in the market, including geopolitical tensions and seasonal fluctuations. The growth was primarily driven by a 5.6% increase in the Agribusiness sector and a remarkable 42.2% rise in Restaurant Operations.
Performance Overview
Tanmiah’s Fresh Poultry segment saw total sales volume increase to 43.2 million birds, reflecting an 8.6% growth year-on-year. Average daily production reached 604,000 birds during this period. The company has also ramped up production at new facilities, adding six farms to enhance capacity utilization. The commissioning of a new mega hatchery and feed mill is on track for the second half of 2026.
Despite the revenue growth, the company faced challenges in profitability. The Gross Profit and EBITDA were adversely affected by rising input costs and lower revenues in certain segments of the Animal Feed and Health business. The EBITDA for Q1 2026 declined by 5.9% year-on-year to SAR 88.5 million, with the EBITDA margin contracting to 12.1% from 13.9%.
Strategic Focus and Operational Challenges
Zulfiqar Hamadani, CEO of Tanmiah Group, emphasized the company’s disciplined execution in navigating a complex external environment. He noted that the diversified platform and proactive strategies allowed Tanmiah to maintain operational continuity and secure critical inputs. The focus on optimizing the asset base and enhancing cost competitiveness has been pivotal in achieving revenue growth across both Agribusiness and Restaurant Operations.
The company is committed to advancing its strategic priorities, which include improving operational efficiency, optimizing asset utilization, and enhancing digital capabilities. These initiatives are aimed at building long-term shareholder value while addressing immediate market challenges.
Financial Highlights
The financial performance of Tanmiah in Q1 2026 is summarized below:
- Revenue: SAR 731.2 million (up 8.0% YoY)
- Gross Profit: SAR 166.8 million (down 1.0% YoY)
- EBITDA: SAR 88.5 million (down 5.9% YoY)
- Net Profit (Loss): SAR 1.1 million (down 95.4% YoY)
- EBITDA Margin: 12.1% (down from 13.9% YoY)
The decline in net profit is attributed to increased diesel and utility costs, heightened distribution expenses, and elevated financing costs related to new assets and stores. The company recorded a net loss attributable to shareholders of SAR 1.1 million, a significant drop from a net profit of SAR 18.9 million in the same quarter of the previous year.
Segmental Revenue Analysis
The Agribusiness segment, which includes Fresh Poultry and Animal Feed and Health Products, remains the primary revenue driver, accounting 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 sales 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, reflecting softer market conditions.
In the Restaurant Operations segment, revenue surged by 42.2% year-on-year to SAR 61.9 million, bolstered by successful marketing campaigns that enhanced customer engagement, particularly during Ramadan.
Cost Management and Future Outlook
The cost of sales rose by 10.9% year-on-year to SAR 564.4 million, driven by increased fuel, utility, and logistics costs. The gross profit margin contracted to 22.8% from 24.9%, influenced by the performance of the Animal Feed and Health segment.
Looking ahead, Tanmiah anticipates a gradual improvement in market conditions throughout 2026. The company aims to enhance the utilization of recently commissioned assets, advance cost optimization initiatives, and expand its product offerings in higher-margin categories. While challenges such as cost inflation and supply chain complexities persist, Tanmiah’s integrated operating model positions it well to adapt and thrive in a changing landscape.
Commitment to Sustainability
Tanmiah is also focused on sustainability, implementing a range of initiatives aligned with the Kingdom’s Vision 2030 and the United Nations Sustainable Development Goals. The company is advancing its decarbonization efforts and has made significant strides in renewable energy projects. The Haradh solar project is on track for completion in July 2026, and additional solar sites have received approval.
Tanmiah’s commitment to sustainability is reflected in its comprehensive portfolio of initiatives, which is expected to have a total EBITDA impact of approximately SAR 100 million. The company’s ESG governance framework is robust, ensuring alignment between strategic objectives and operational execution.
For further details, visit the source: www.zawya.com.
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