RIYADH: Savola Group, Saudi Arabia’s largest food products company, reported a 96 percent fall in first-quarter net profit on Thursday, as a result of lower sales and lower margins in the retail sector. Net profit in the three months to March 31 was 4.8 million riyals ($1.3 million), compared with 119.4 million riyals in the same period a year earlier, Savola said in a bourse statement. EFG Hermes forecast Savola would make a quarterly net profit of 105 million riyals, while NCB Capital forecast a net profit of 141 million riyals. Like most Saudi publicly listed firms, Savola adopted IFRS accounting standards in January this year. The company said some of its figures have been restated as a result.
Savola attributed the drop in net profit due to lower sales and margins in the retail sector, as well as higher charitable contributions and tax. Retailers in Saudi Arabia have faced challenges over the past year or so as a protracted slump in oil prices put government and consumer spending under pressure. Still, Saudi dairy producer Almarai last month reported a first quarter net profit of 328.3 million riyals, up 13.7 percent from the prior-year period, while Jarir Marketing , one of Saudi Arabia’s largest retailers, reported a 26.5 percent increase in first quarter net profit to 221.4 million riyals.
