Savola Group — Interim / Quarterly Report 2015

Jan 20, 2016

Savola Group announces the interim financial results for the period ending on 31-12-2015 (Twelve Months)

2050 · 20/01/2016 15:38:27 · Announcement #40889 · View on Saudi Exchange

Savola Group announces the interim financial results for the period ending on 31-12-2015 (Twelve Months)

Element	Current quarter	Similar quarter for previous year	% Change current	Previous quarter	% Change previous
Net profit (loss)	515.3	434.4	18.62	371.6	38.67
Gross profit (loss)	1,305.7	1,368.7	-	1,262.8	3.4
Operational profit (loss)	531.2	604.6	-	510.6	4.03
All figures are in (Millions) Saudi Arabia, Riyals

Element	Current period	Similar period for previous year	% Change
Net profit (loss)	1,791.7	2,072.3	-
Gross profit (loss)	5,122.2	4,863.7	5.31
Operational profit (loss)	1,982.4	2,454.7	-
Earning or loss per share, Riyals	3.36	3.88	-
All figures are in (Millions) Saudi Arabia, Riyals

Element	EXPLAINATION
Reasons of increase (decrease) for quarter compared with same quarter last year	The increase in the Group net income for 4th Q 2015 compared to the same quarter last year is mainly attributed to the insurance claim settlement due to the fire in Raw Sugar warehouse in 2013 and gain on sale of land recorded in the current quarter, lower net financial charges, no impairment in non-core investment, reduced zakat & income tax. This is despite disposal of Savola Packaging Systems Co (SPS or Plastic Sector) during Q1 of 2015 and increased Minority share in income. Gross Profit is lower mainly due to lower margins in Food Sector. Operating income is lower due to increased operating expenses, which were higher primarily as a result of opening of new stores in the Retail Sector (Panda Sores) during 2015.
Reasons of increase (decrease) for period compared with same period last year	The net profit for the period (twelve month) of 2015 compared to same period of last year registered a decline which is attributed mainly due to the lower share of profit from one of the associates and disposal of Plastic Sector during Q1 of 2015. This is despite recording the insurance claim settlement for the fire in Raw Sugar warehouse in 2013, gain on sale of land, no impairment in non-core investment, lower net financial charges, zakat & income tax and minority share in income. Gross Profit is higher mainly due to increased revenue from Retail Sector partly off-set by lower gross profit in Food Sector. Operating income is lower mainly due to increased operating expenses, which were higher primarily as a result of opening of new stores in Retail Sector compared to same period last year.
Reasons of increase (decrease) for quarter compared with previous quarter	The increase in the Group net income for 4th Q 2015 compared to the last quarter is mainly attributed to the insurance claim settlement due to the fire in Raw Sugar warehouse in 2013, gain on sale of land recorded in the current quarter, lower net financial charges and zakat & income tax. This is despite disposal of Plastic Sector during Q1 of 2015, reduced share of profits from associates and increased minority share in income. Gross Profit is higher mainly due to increased revenue from Retail Sector. Operating income is higher because of the seasonal nature of higher income in Retail Sector (Panda Stores) in the last quarter of the year despite increased operating expenses, which were caused by the aggressive expansion.
Reclassifications in quarterly financial results	Certain comparative figures have been reclassified to conform to this quarter presentation.
Other notes	In accordance with the generally accepted accounting standards in Saudi Arabia, all amounts of income statement related to SPS have been reclassified and net income of SPS for the period ended December 31, 2014 has been reclassified as Income from discontinued operations in the interim consolidated income statement as SPS was entirely sold in Q1 2015 as announced in Q1 2015. During December 2015, as per information provided by IMF combined with other indicators Iran ceased to be a hyperinflationary economy as of December 31, 2015. Accordingly, the Group has ceased to apply hyper-inflation accounting for Iran operation as per generally accepted accounting standards in Saudi Arabia. The Group continues to adopt hyperinflationary accounting for Savola Sudan as at December 31, 2015. In this connection Eng. Abdullah M. Noor Rehaimi - Group Managing Director/CEO indicated that the Group has recorded net income for full year of 2015 amounting to SAR 1.79 Billion compared to SAR 2.07 Billion last year, a decrease of 13.5%. Also the Group's net income (before capital gain & exceptional items) reached to SAR 1.49 Billion which is 23% lower than last year and 9% lower than the revised forecast of SAR 1.63 Billion announced on Tadawul previously due to aggressive expansion in Retail Sector(Panda stores).

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