Gulf food companies see declines in first-quarter figures

Figures in the three months to March 31 stood at 92.9m riyals (US$24.78), compared with 470.5m riyals over the same period a year earlier, Savola said in a bourse statement.

An average of three analysts polled by Reuters forecast Savola would make a quarterly net profit of 268.1m riyals.

The company attributed the fall profit mainly to the fact its earnings had been boosted in the same period last year by a 265.2m riyal capital gain from the sale of its packaging unit to Takween Advanced Industries.

It is the latest Saudi manufacturer to report substandard earnings for the period, blamed largely to the effect of lower oil revenues on the petroleum producer.

Almarai, the Gulf's largest dairy company, reported a marginal rise in first-quarter net profit but warned of challenging market conditions.

Savola said that lower consumer spending and higher operating expenses from its retail expansion also affected its results, as has the effect of a devalued Egyptian pound on an indirect subsidiary in Egypt, United Sugar Company of Egypt.

In neighbouring Kuwait, Kuwait Food Co, known as Americana, posted a 12.3% fall in first-quarter net profit due, it said, to higher costs and foreign exchange losses.

The restaurant operator, which holds a KFC franchise, made a net profit of 15.2m dinars (US$50.5m) over the period, a fall from 17.3m over the same period in 2015, a bourse statement said.

Kuwait's al-Kharafi family. Americana’s major shareholder, said in February that it had signed an initial agreement to sell its holding to Adeptio Group subject to due diligence and board and regulatory approvals.

The investment firm completed due diligence in April, with the chairman of the Kuwaiti food firm saying later that month the fact they hadn't asked for an extension was a positive sign.