Saudi food group Savola posts 22 pct drop in second quarter profit

Saudi Arabia’s Savola Group posted 21.68 per cent drop in second quarter net profit after zakat and tax compared to the same period last year.

The food and retail investment group reported net profit of 110.2 million riyals ($29.39 million) for Q2 2019 versus 140.7 million riyals for the same quarter last year, it said in a bourse filing on Tuesday.

The Group said the fall is mainly due to a decrease in the share of profit from an associate, higher zakat and tax expense, increase net finance cost from adoption of new leasing standard IFRS 16, and lower sales in the food sector.   

The firm is involved in the food industry through its Savola Foods unit as well as financial investments in other companies.

Savola Foods includes B2C brands it operates Afia, Yudum, Al Tayeb, and Italiano.

Savola’s other investments in the food sector include a 34.52 per cent shareholding in Saudi F&B major Almarai and 51 per cent ownership of frozen foods manufacturer Al Kabeer Group.

SIX-MONTH PERFORMANCE

The firm’s six-month performance was better for 2019 compared to H1 2018, posting 107.1 per cent jump in net profit after zakat and tax to 116.6 million riyals from 56.3 million riyals.

It attributed the increase mainly to higher sales and gross profit in the retail sector, higher gross profit of the food sector, a decrease in operating cost, and a non-recurring zakat and tax provision reversal.

Savola Retail’s profits are generated exclusively through grocery store chain Panda Retail Company.

($1 = 3.75 Saudi riyals)

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