RIYADH: Saudi-based conglomerate Savola Group posted a near-2 percent rise in third-quarter net profit on Monday, sharply below forecasts, after a rise in global sugar prices ate into its margins.
Savola, which owns the Middle East’s biggest sugar refining business and also produces edible oil, made a net profit of 283 million riyals ($75.5 million) in the three months to end-September, up from 277.9 million riyals a year earlier, it said in a bourse statement.
This is below an average net profit of 312.1 million riyals forecast by six analysts in a Reuters’ survey.
Savola will offer shareholders a 0.25 riyals per share dividend for the third quarter of 2010, it added.
Sales rose 10 percent to 5.6 billion riyals in the quarter.
"An increase in global prices of raw sugar had a negative impact on profitability margins," Savola said.
It also attributed the decline to start-up costs of new retail outlets of its Panda-Azizia supermarket chain.
The firm said it expects to make a net profit before capital gains of 230 million riyals during the fourth quarter, which would be 14.5 percent below its level in the same period in 2009.
It has maintained an earlier net profit forecast for the full 2010 year of 920 million riyals excluding capital gains, which is 3.4 percent below the net profit it made in 2009.
Savola is also the biggest shareholder in Almarai Co, the Middle East’s biggest dairy firm by market value.
