Saudi food group Savola’s net profit surged 271.69% in the second-quarter compared to the same three months last year.
The Group attributed its net profit of 409.6 million riyals ($109.23 million) to higher sales and margins in retail and frozen foods sectors, higher share of profit from associates, and lower operating expenses and net finance cost due to a drop in financial charges on borrowings.
Sales for the three months ending June 30 reached 6 billion riyals, a 3.34% rise versus the same quarter in 2019.
Savola’s net profit from the first to the second quarter also saw a significant increase, of 137.04%, the company reported in a bourse filing on Sunday (August 16).
Sales from the first three months of the year to the second quarter grew by 1.42%, reflecting a strong performance amid the continuing COVID-19 pandemic.
For the first half of the year, Savola’s sales increased by 8.19% to 11.93 billion riyals compared to 11.03 billion riyals in 2019.
Net profit for January to June 2020 reached 582.3 million riyals, an increase of 399.4% versus the 116.6 million riyals last year.
SAVOLA’S BUSINESS LINES
Savola performed well amid the COVID-19 crisis due to its food business that is mainly in staples.
It is involved in the food industry through its Savola Foods unit and also has financial investments in other companies.
Savola Foods is mainly in the business of household staples such as edible oil, sugar, pasta, and ghee. Its B2C brands include Afia (edible oils), Yudum (edible oils, focused on Turkish market), Al Tayeb (groundnut oil), and Italiano (pasta brand, based in Egypt). In 2019, Savola Foods hit sales, including exports, of 1.6 million tons of edible oil, 2.2 million tons of sugar and 279,336 tons of pasta, according to its website.
Savola’s retail business comprises the Panda grocery store chain in Saudi Arabia and Egypt.
The Saudi company’s focus geographies are the Middle East, North Africa, and Turkey.
The firm’s other investments in the food sector include a 34.52% shareholding in Saudi F&B major Almarai and 51% ownership of frozen foods manufacturer Al Kabeer Group.
Savola’s 2019 net profit was 475.6 million riyals, a rebound from the loss of 520.4 million riyals in 2018.
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