Savola Group, the Saudi Arabian conglomerate, saw its annual net profit slump in 2008 due to provisions the company made on its investments and a “collapse” in commodity prices.
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The company, which makes cooking oil and refined sugar, posted net profit of SAR202m (US$53.9m) last year – against SAR1.23bn a year earlier.
Tumbling commodity prices led Savola to make “substantial provisions” against its inventory position and investment portfolio. The economic downturn also hit the value of Savola’s investment portfolio, the company said.
Profits from operations reached SAR673m last year compared to SAR733m in 2007.
Savola posted a annual profit of SAR1m for its food division as the fall in raw material prices led the unit to book losses of SAR252m for the fourth quarter.
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By GlobalDataAnnual sales rose 32% to SAR13.8bn.
Managing director Dr. Sami Mohsen Baroum forecast net profit of SAR800m for 2009. Dr. Sami Baroum projected net profit of SAR160m for the first quarter of the year.
