Saudi food conglomerate Savola Group has reported revenues of SR13.9 billion ($3.7 billion) for the first half of the year compared to SR14.4 billion ($3.8 billion) last year, thus registering a 3.3% decline.

However, its net profit for the six-month period ended June 30, 2023 surged to hit SR525 million, up 8.3% over last year's figure of SR485 million.

Announcing the financial results for H1, Savola said the drop in the revenue was primarily due to Ramadan advancement in Q1 2023 by 10 days in addition to the revenues of Food Processing segment that were impacted by lower crude edible oil prices as well as disposal of investment in Savola Morocco Company and temporary suspension of operations in Republic of Sudan.

Savola said the growth in the net profit was mainly driven by an increase in gross profit of the Food Processing and Retail segments; capital gain amounting to SR18.5 million on the disposal of investment in Savola Morocco Company; and total refund of custom duty from regulatory authority in KSA having a net impact of SR23.3 million.

The Saudi group said it was able to achieve net profit growth in H1 despite higher operating expenses; net finance costs and higher zakat and income tax expense.

For the six-month period, revenues increased in the Retail and Frozen Foods segments by 3% and 8%, respectively compared to the same period last year.

While revenues fell in the Food Processing and Food Services segments by 7% and 9%, respectively over 2022.

For H1, Savola said the net profit from the Food Processing segment increased by 14% while net profit from the Frozen Foods segment fell 9%.

The Retail segment too recorded a net loss of SR37 million for the six months ended June 30, 2023 compared to a net loss of SR107 million last year.

The Food Services segment recorded a net loss of SR8 million for the six months ended 30 June 2023 compared to a net profit of SR49 million in the same period in the previous year, it added.

On its Q2 results, Savola said its revenue fell to SR6.1 billion from SR6.9 billion last year, showing a 11.5% decrease.

The group's net profit plunged 38% to SR132 million from SR214 million last year mainly due to lower share of profits from associates; higher net finance cost; higher operating expenses and higher zakat and income tax expense.

Savola pointed out that the decrease in net profit was despite lower net loss in the retail segment.

During Q1 2023 there was capital gain amounting to SR18.5 million on the disposal of investment in Savola Morocco Company and refund of custom duty from regulatory authority in KSA having a net impact of SR23.3 million.

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