Savola Q3 profit falls 67% as retail arm swings to loss

Summary

• Savola Group's third-quarter net profit dropped 66.7% to $34.21 million, the company reported.
• Last year's quarter carried a $65.76 million zakat provision reversal that did not repeat in 2026.
• Recurring profit was nearly flat, signaling the headline collapse is largely a comparison effect.

The latest

Savola Group's net profit fell 66.7% in the third quarter of 2026 to 128.5 million Saudi riyals ($34.21 million), down from 385.6 million riyals ($102.65 million) a year earlier. The Saudi food and retail group attributed the drop to one-off gains booked in the comparison period that were not repeated, alongside a deteriorating retail performance. Revenue still edged up 1.5% to 6.55 billion riyals ($1.74 billion).

Details

• The one-offs: Savola said the 2025 comparison quarter included a 247 million riyal ($65.76 million) reversal of zakat provisions tied to prior years, plus 40 million riyals ($10.65 million) in gains from settling put option liabilities. Neither recurred in 2026, accounting for the bulk of the swing.
• The retail drag: Retail flipped from a net profit of 24 million riyals ($6.39 million) in the third quarter of 2025 to a loss of 18 million riyals ($4.79 million). The group blamed intense competition, continued price investment to defend market share, and higher operating costs at newly opened stores.
• Top line: Revenue rose 1.5% to 6.55 billion riyals ($1.74 billion) from 6.45 billion riyals ($1.72 billion). Gross profit was up 0.5% at 1.23 billion riyals ($327.88 million), while operating profit slipped 1% to 267.3 million riyals ($71.17 million) — volume growth without margin gain.
• Food industries: The quarter's strongest segment, with net profit up 31% to 141 million riyals ($37.54 million) from 107 million riyals ($28.49 million) on higher revenue. Over nine months it earned 454 million riyals ($120.86 million) against 274 million riyals a year earlier.
• Food services: Food services returned to profit at 3 million riyals ($0.80 million), reversing a 48 million riyal ($12.78 million) loss in the same quarter of 2025. Frozen foods edged up to 9 million riyals ($2.40 million) from 8 million riyals ($2.13 million).
• The underlying number: Stripping out non-recurring and exceptional items, Savola put recurring net profit at 127 million riyals ($33.81 million) for the quarter, against 129 million riyals ($34.34 million) a year earlier — a decline of roughly 2%, far from the 67% headline fall.
• Nine-month picture: Net profit for the first nine months fell 22.2% to 529.6 million riyals ($140.98 million) from 680.4 million riyals ($181.14 million). Revenue rose 3.1% to 20.13 billion riyals ($5.36 billion) and operating profit climbed 10.7% to 963.4 million riyals ($256.46 million).
• Retail over nine months: Retail held a profit of 15 million riyals ($3.99 million) across the nine months, down from 72 million riyals ($19.17 million). Recurring nine-month net profit rose 26% to 500 million riyals ($133.11 million) from 396 million riyals ($105.42 million).
• Sudan exit: Savola said it exited its Sudan operations during 2026 for 52.5 million riyals ($13.98 million), booking a gain of 43 million riyals ($11.45 million), of which 41 million riyals ($10.91 million) was the group's share. It did not disclose the buyer.

Between the lines

The gap between the two profit lines is where the story sits. A 67% headline drop against a 2% decline in recurring profit says the collapse is mostly an accounting comparison, not an operational one. The genuine deterioration is narrower and specific: retail, where price investment and new-store costs turned a profit into a loss while food industries grew 31%.

What's next

Watch whether retail losses persist into the fourth quarter as price competition continues, whether food industries sustains its 31% growth, and how the Sudan exit gain lands in full-year results.

Source: ⁦ontime+⁩