Saudi’s Savola Beats Estimates with 32.4% Net Profit Gain

Saudi food producer Savola Group reported a higher than expected 32.4 per cent jump in second-quarter net profit on Wednesday, beating analyst forecasts as it benefited from higher sales especially in its retail business.

The company, a producer of cooking oil, sugar and other foodstuffs, made a net profit in the three months to June 30 of SAR513.3 million ($136.9 million), compared with SAR387.8 million in the same period a year earlier, according to a bourse filing.

Six analysts polled by Reuters had forecast, on average, that Savola would record a net profit for the quarter of SAR435 million.

The Kingdom’s largest food products firm said higher revenue growth in the second quarter, especially in its retail sector, as well as an increase in its share of net income and dividend income from some of its associates, boosted its earnings and helped offset rising finance costs.

Abdulraouf Mannaa, chief executive, said in a statement he expected net income of SAR460 million before capital gains in the third quarter – in line with SAR457.4 million a year ago.

Mannaa also said the company was on course to achieve its target for full-year net income before capital gains of SAR1.8 billion.

Savola also said it would pay a cash dividend of SAR0.5 per share for the second quarter, matching the payout in the same period of 2013.