Almarai Co. — Capital/Financing Update 2016

Jan 10, 2016

Addendum to the announcement from Almarai Company regarding the expected financial impact of the cabinet resolutions to increase the prices of energy products

2280 · 10/01/2016 08:25:00 · Announcement #40696 · View on Saudi Exchange

Addendum to the announcement from Almarai Company regarding the expected financial impact of the cabinet resolutions to increase the prices of energy products

With reference to the Cabinet resolutions issued on Monday, 17/3/1437H (corresponding to 12/28/2015) regarding the increase in the prices of energy, fuel, electricity and water and further to the company announcement on Tadawul website on 18/03/1437H (corresponding to 29/12/2015G), Almarai Company announces its estimate of the expected full impact as follows:

- The increase in energy, fuel, electricity and water tariffs, will result in an estimated additional cost of approximately 200 million Saudi riyals for the year 2016.

- The indirect financial impact, resulting from expected price increases from various local suppliers, who will be subject to the energy and water tariffs increase, is estimated to add a further increase in costs of approximately 100 million Saudi riyals for the year 2016.

In addition, the assessment of the full impact of the recent resolutions of Cabinet, including the Cabinet resolution issued on Monday, 25/2/1437H (corresponding to 12/7/2015) regarding the suspension of growing green fodder in the Kingdom and the consequent need to import 100% of requirements by January 2019 will also add further costs. The resulting increase in imported forage at higher cost, net of existing subsidy, is estimated to increase input costs by approximately 200 million Saudi riyals for the year 2016, with this amount increasing year by year until the 100% target is reached.

Almarai will continue to focus on business efficiency, cost optimization and other initiatives to mitigate the effect of these increases.

The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.