| Element | Current quarter | Similar quarter for previous year | % Change current | Previous quarter | % Change previous |
|---|---|---|---|---|---|
| Net profit (loss) |
246.7
|
434.4
|
-
|
92.9
|
165.55
|
| Gross profit (loss) |
1,289.6
|
1,353.2
|
-
|
1,223.1
|
5.44
|
| Operational profit (loss) |
414.2
|
542.7
|
-
|
285.5
|
45.08
|
| All figures are in (Millions) Saudi Arabia, Riyals | |||||
| Element | Current period | Similar period for previous year | % Change |
|---|---|---|---|
| Net profit (loss) |
339.6
|
904.9
|
- |
| Gross profit (loss) |
2,512.7
|
2,512.4
|
0.01 |
| Operational profit (loss) |
699.7
|
913.3
|
- |
| Earning or loss per share, Riyals |
0.64
|
1.69
|
- |
| All figures are in (Millions) Saudi Arabia, Riyals | |||
| Element | EXPLAINATION |
|---|---|
| Reasons of increase (decrease) for quarter compared with same quarter last year | The decrease in the Group net income for 2nd Quarter 2016 compared to the same quarter last year is mainly due to lower gross profit, higher operating expenses and financial charges despite higher share of income from associates, lower zakat and tax and reduced share of minority interest. Gross profit decrease is mainly due to lower margins in the Food and Retail sectors. The increase in operating expenses is mainly due to opening of new stores and new distribution center in the western region in the Retail sector. Increased financial charges are due to higher currency exchange losses. Furthermore higher losses in USCE (classified as discontinued operations) mainly due to currency exchange also negatively impacted the Group profit. |
| Reasons of increase (decrease) for period compared with same period last year | Reduction in the Group net income for the period ended 30 June 2016 compared to the same period last year is attributed mainly to capital gain recorded from disposal of Savola Packaging Systems Co during Q1 of 2015, higher losses from USCE due to currency exchange and increased financial charges despite lower zakat and income tax, increased share of net income from associates and positive impact of reduced minority interests during this period. Gross profit remained the same for the period compared to same period of last year due to the growth in revenues and lower cost of revenues in the Retail Sector, despite the decline in revenue in the Food Sector. Operating income was lower compared to the same period last year due to increased operating expenses which is driven by growth in Retail operations. |
| Reasons of increase (decrease) for quarter compared with previous quarter | The increase in the Group's net income for 2nd Quarter 2016 compared to 1st Quarter 2016 is mainly due to higher revenue and gross profit (which is a result of seasonality) and increased share of income from associates. Operating profits have increased compared to previous quarter despite higher operating expenses. The net profit has increased despite higher financial charges and Zakat and Tax. The minority share in income has reduced and losses from USCE are lower as compared to the previous quarter. |
| Reclassifications in quarterly financial results | Certain comparative figures have been reclassified to conform to this quarter presentation. |
| Other notes | As announced on Tadawul on 29th March 2016, Savola Group (Savola) and other shareholders' of United Sugar Company - Egypt (USCE - an indirect subsidiary of Savola) have entered into a Shareholders' Agreement with European Bank for Reconstruction and Development (EBRD). Therefore, subsequent to the issuance of new shares and completion of the related legal formalities and government approvals, Savola will account for its investment in USCE on equity basis of accounting. Till such time, in accordance with the generally accepted accounting standards in Saudi Arabia, the assets and liabilities of USCE as of June 30, 2016 have been classified as 'held for sale' in the interim consolidated balance sheet and results of operations of USCE for the six-month period ended June 30, 2016 has been disclosed as 'loss from discontinued operations' in the interim consolidated income statement. Also the amounts relating to USCE for the six-month period ended June 30, 2015, have also been reclassified as 'loss from discontinued operations' in the interim consolidated income statement. Eng. Rayan Fayez - Group Chief Executive Officer, highlighted that the Group's quarterly results were negatively impacted by lower consumer spending and aggressive expansion in Retail sector in prior periods which resulted in higher operating expenses. Efforts are also underway to mitigate the impact of currency devaluation on Food Sector operations. We pray to God Almighty to help us in achieving our long term goals. We would like to inform the shareholders and investors that the interim consolidated financial statements of the Group for the period ended 30 June 2016 will be uploaded on Savola website after submitting it to the concerned authorities, and will be available through following link: http://www.savola.com/SavolaE/Financial_Reports.php |
The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.