Savola SJSC : Group announces the interim financial results for the period ending on 31-12-2016 (Twelve Months)

The Group recorded net loss for the 4th Quarter 2016 compared to the profit achieved in the same quarter last year is mainly attributed to the following:

- non-recurring items booked in current quarter comprised of impairment of assets and goodwill related to Egypt operations in Savola Foods Company of gross SAR 302mn (net impact to the Group of SAR 245mn), inventory reduction costs in Panda Retail Company of gross SAR 377mn (net impact to the Group of SAR 343mn) and impairment in the Group of non-core investments of SAR 272mn.

- lower gross profit, mainly due to lower margins in Retail sector and one time cost to reduce inventory,
- lower share of income from an associate,

- higher financial charges, due to higher currency exchange losses,

- higher losses in United Sugar Company - Egypt USCE (classified as discontinued operations) which are mainly due to higher currency exchange losses despite higher margins,

- the Group also recorded gain on sale of land of SAR 38.8mn and gross insurance proceeds of SAR 126.5mn in Q4 2015.

This recorded loss came despite:

- non-recurring net positive impact for the Group of SAR 26mn for reinstatement of the classification of edible oil subsidiary of Savola Foods Company in Morocco from held for sale,

- slightly lower operating expenses, mainly due to reduction in selling and distribution expenses in Food and Retail sector,
- lower zakat & taxes, and
- increase share of minority in the losses.