Provisions hit Savola profit
Jeddah, January 18, 2011
Unexpected provisions for loss-making units and asset write-offs all but wiped out fourth-quarter profits at Saudi food company Savola.
Savola Group, which owns the Middle East's biggest sugar refining business and produces edible oil, said net profit fell to just SR2 million ($533,300) in the quarter after SR268.6 million a year ago.
Analysts surveyed by Reuters expected Savola to make a net profit averaging SR241 million.
Savola, which recently saw a change at its helm, blamed provisions for accumulated losses at some operations, asset write offs at units aboad and for its stake in stake in Emaar among other reasons, according to a bourse statement.
'The drop in the group's net income for the fourth-quarter is manly resulting from the review of the food business strategy,' the company said.
For 2011, it expected a net profit before capital gains of SR1 billion, adding that it will recommend paying a dividend of 1.25 riyals per share for 2010, according to separate statements.-Reuters