Savola profits increased to 899.2 million riyals during 2023, up 21%

Savola Group announced an increase in net profit during the year ending December 31, 2023 to 899.2 million riyals, compared to 742.8 million riyals in the year before last, by 21%. This came after today’s announcement of the annual financial results ending on December 31, 2023.

Operating profit reached 2.3 billion riyals during the year ending December 31, 2023, compared to 1.6 billion riyals in the year before last, a growth of 39.7%.

Revenues also amounted to 26.8 billion riyals last year, compared to 28 billion riyals in the year before last, a decrease of 4.4%.

Earnings per share last year reached 1.69 riyals, compared to 1.39 riyals in the year before last.

During the year ending December 31, 2023 AD, the group achieved revenues amounting to 26.8 billion riyals, compared to 28.1 billion riyals for the previous year, recording a decrease of 4%, which is mainly due to the decrease in revenues from the food manufacturing sector due to the decline in crude edible oil prices and the decline in the value of currency exchange. Foreign investments in some foreign markets, as well as the exit from investment in Savola Morocco and the temporary suspension of operations in Savola in the Republic of Sudan due to the ongoing conflict. This decrease in revenues during the year 2023 AD came despite the increase in revenues recorded in the retail sector.

The group recorded a net profit of 899 million riyals for the year ending December 31, 2023, compared to a net profit of 743 million riyals for the previous year, an increase of 21%.

The recorded increase in net profit is mainly due to the following:

– Increase in gross profit recorded in the food manufacturing, retail, and frozen food sectors.

– An increase in the group’s share in the profits of associate companies.

– Reversing the net loss resulting from the decline in value of some non-current assets mainly in the food manufacturing and retail sectors in the amount of 111.9 million riyals during the year 2023 AD, while the reversal of the net loss resulting from the decline in value of some non-current assets mainly in the food manufacturing sectors, Retail and food services during the year 2022, with a value amounting to 65.2 million riyals.

– Refund of customs duties amounting to 23.3 million riyals by the Zakat, Tax and Customs Authority in the Kingdom of Saudi Arabia.

The increase in net profit came despite the following:

-Recording capital gains resulting from the exit from some investments/operations amounting to 18.7 million riyals during the year 2023 AD, which is less than the capital gains resulting from the exit from some investments during the year 2022 AD, which amounted to 41.8 million riyals.

– High net financing cost.

-High operating expenses.

– Increase in zakat and income tax expenses.

It should be noted that the retail sector has reached the operating break-even point for the year ending December 31, 2023.

Some comparative items, elements and clarifications in the interim consolidated financial statements have been reclassified to comply with the accounting policies applied for the financial year, which were prepared in accordance with the International Financial Reporting Standards (IFRS) approved in the Kingdom of Saudi Arabia. For more information, please refer to Note No. 40 (Amendments to the standards and amendments that have been issued, but not yet effective) in the consolidated financial statements for the year ending December 31, 2023 AD, December 31, 2022 AD.

Profits by sector:

The net profit of the food manufacturing and frozen food sectors increased during the year ending December 31, 2023 compared to the previous year by 12% and 9%, respectively.

Continued investment in the Customer Experience Improvement (CXR) program contributed positively to the retail sector (Panda), achieving a net profit of 47 million riyals for the year ending December 31, 2023, compared to a net loss of 158 million riyals for the previous year.