Saudi food conglomerate Savola Group registered a net loss of SR254 million ($67.6 million) for the fourth quarter of 2021 compared to a net profit of SR45 million.

 

These earnings came below the SR135 million estimate of leading Saudi financial services provider Al Rajhi Capital.

 

Profitability of the company was impacted by the one-off impairments of SR422 million ($112 million) and but for this, the profitability would have been better than expected. 

 

However Savola's reported revenue came in at SR6.746 billion, higher than Al Rajhi's expectations of SR6.214 billion. 

 

The gross margins reduced by 400bps y-o-y, mainly due to dilution in the margins of food and retail segments. 

 

The operating expenses, increased substantially, due to one-off impairment provisions made during the period, as the company registered an operating loss of SR75 million, compared to an operating profit of SR228 million for the same period previous year. 

 

Adjusted for this one off, EBIT margins reduced to 5.1% for Q4 2021, compared to 5.4% a year back. Savola’s retail business continues to be impacted by increasing inflation, and changing consumption pattern of the consumers.-TradeArabia News Service