SAVOLA Achieves a Net Profit of SAR 911 Million for the Year 2020, an Increase of 91.5% vs Last Year And Distributes Cash Dividends of SAR 400.49 million to its Shareholders for the Year 2020
Ain Alalam – Rashad Iskandrni
Savola Group, one of the leading strategic investment holding companies in the food and retail sectors across the MENA region (Middle East, North Africa), announced its interim financial results for the twelve months period ended 31st December 2020 which states that the net profit has significantly increased to SAR 910.8 million in comparison to SAR 475.6 million for the year ended 31st December 2019, which represents an increase of 91.5%. The announcement also included achieving revenues of SAR 21.7 Billion for the year 2020 in comparison to SAR 21.4 Billion for the previous year, an increase of 1.4%.
The strong growth in the Group’s net profit is mainly attributed to higher gross profits due to higher sales and margins; higher share of profits from associates; lower operating expenses; and lower net finance cost. The net profit for the period was achieved despite of higher zakat and tax expenses; and the decrease in the zakat and tax provision reversal relating to prior years’ assessments was recorded in the prior year.
In this regard Mr. Waleed Fatani, Savola Group CEO, stated that “the strong results for this period that ended on 31st December 2020 were in line with our strategy and our commitment to the development of the retail and food sectors, while focusing on group-wide cost rationalization and efficiencies. These achievements are accomplished while actively managing the risks and implications of Novel Coronavirus (COVID-19) and its impact on the Company’s operations in light of the local and international market and economic conditions in the countries in which the Group operates”.
On the other hand, and in a continuation of its declared Dividend Policy to distribute dividends to its shareholders and based on the net profit reported for the year 2020, which amounted to SAR 910.8 Million, the CEO announced that the Savola Group Board of Directors has recommended the distribution of SAR 400.49 Million (i.e. SAR 0.75 per share) as cash dividends for the year 2020, which represents 7.5% of the Company’s nominal share value.
It is worth mentioning that revenue by segment before intersegment eliminations- for the year ended 31 December 2020 as compared to the last year, Revenues increased in the Retail and Frozen Food segment by 8.9% and 18.8%, respectively. While revenues decreased in the Food Processing and Food Services segments by 6.1% and 16.6% respectively, as compared to last year.
Also, net profit by segment for the year ended 31 December 2020 as compared to last year, shows net profits from the Food Processing, Frozen Foods and Investments which has increased by 6.4%, 57.1% and 15.6%, respectively the Retail segment recorded a net profit of SAR 71.87 million in 2020 compared to a net loss of SAR 342.41 million last year.
Founded in 1979, Savola Group invests in the food and retail sectors across MENA. It operates Savola Foods Company, which produces and exports everyday household products including oil, sugar, and pasta in more than 50 countries around the world. It also invests in the retail sector, notably in the largest grocery store chain (Panda), with 205 stores in more than 42 cities across the Kingdom of Saudi Arabia and Egypt. Savola also owns a stake of 34.52% in Almarai dairy company and a stake of 51% in Alkabeer Group for frozen foods. Savola also owns the largest stake (49%) in Herfy Food Services Company, which manages 394 outlets.