Savola Expects 7% Increase in Quarterly Profit Amid ExpansionShaji Mathew
Savola Group, the Saudi retailer seeking to sell Islamic bonds this month, expects first-quarter profit to climb 7 percent as it expands in the Middle East.
The Jeddah-based company forecast 260 million riyals ($69 million) of profit before capital gains and exceptional items and full-year net income of 1.5 billion riyals, according to a statement to the Saudi stock market today. Savola posted a profit of 242 million riyals in the first quarter of 2012, according to data compiled by Bloomberg.
Savola is expanding its retail business in the Arab world’s largest economy and its sugar refining operations in Egypt as it seeks to boost revenue. The company said in October it paid 2 billion riyals to boost its stake in PepsiCo Inc. partner Almarai Co. to 36.5 percent. Savola said yesterday it plans to complete the sale of Islamic bonds by Jan. 23
Fourth-quarter profit declined 17 percent to 413.4 million riyals from a year earlier as a one-time capital gain wasn’t repeated, according to the company statement. Savola had a gain of 153 million riyals from selling land plots in the fourth-quarter of last year.
Savola shares gained 39 percent last year compared with a 6 percent increase for the benchmark Tadawul All Share Index. The stock closed 0.3 percent lower at 39.9 riyals in Riyadh trading yesterday, giving the company a market value of about 20 billion riyals.
Savola’s board recommended a dividend of 0.50 riyal a share for the fourth quarter, according to the statement. That compares with a dividend of 0.30 riyal in the previous three quarters and 0.55 riyal in the fourth quarter of 2011, according to data compiled by Bloomberg.