Savola Group's profits surge, to continue expansion

JEDDAH — Savola Group profits have reached SR1.15 billion compared to SR1.2 billion last year, according to the preliminary joint financial results achieved by the Group for the fiscal year ending on Dec. 31, 2006, and approved by the board of directors.

By Habib Shaikh

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Published: Fri 2 Feb 2007, 10:07 AM

Last updated: Sat 4 Apr 2015, 9:46 PM

The board meeting, held recently, was chaired by Adel Mohammed Faqih, Chairman of the Board.

The profits made in 2005 included capital profits reaching SR711 million. This was achieved by offering 30 per cent of the Group's share in Al-Marai Company during the third quarter of 2005 for public subscription.

Dr. Abdul Raouf Al-Manna, managing director of the Group, said that the operational profits for the fiscal year 2006 reached SR473.9 billion compared to SR305.8 billion for the previous year — an increase of 55 per cent. This increase was attributed to improved performance in the branch companies of the Group within and outside the Kingdom in general. The profit for each share at the end of 2006 reached SR3.07 compared to SR3.37 last year.

Manna added that the Group achieved net profits for the first quarter of the fiscal year 2006 reaching SR233 million compared to SR192 million compared to the same quarter last year.

The Board of Directors approved the distribution of profits reaching SR93.75 million for the fourth quarter of 2006 at the rate of SR0.25 per share. With this, the total profits distributed for the fiscal year 2006 rose to SR356.25 million.

He said the date when the profits will be due for shareholders registered in the registers of the company will be at the end of trading (Tadawul) on the day the Ordinary General Assembly holds its meeting, which is expected on April 18.

The Group will publish the detailed financial statements for the fourth quarter including the preliminary results for the end of 2006 on Tadawul Web site and in the local newspapers according to the period specified by the regulations.

In another development, the Board of Directors approved the estimated budget and the Group's plan for the fiscal year 2007.

During the current year, the Group will continue implementing the strategy aiming at further expansion in the Mideast, North Africa and East Asia.

At present the Group is in the process of establishing companies in Algeria, Iran and Egypt. It is also expanding in the fertilisers and petrochemicals sector and is studying expansion in the telecommunications sector besides pursuing several other promising opportunities.

Earlier, Manna said that the Board had approved signing of a sale and purchase agreement with the principal shareholders of Egyptian Fertilisers Company SAE (EFC).

The execution of such an agreement would result in the acquisition of the remaining 70 percent that Savola does not own in the company, which is estimated at SR3 billion. This acquisition remains subject to the parties agreeing on detailed commercial terms, contracts drafting and execution, regulatory approvals and Savola's EGM approval.

Once fully consolidated, EFC is expected to contribute an additional SR300 millions to Savola's operating profits in 2007.

"The transaction represents an important milestone in Savola's long-term strategy of becoming a prominent player in the petrochemical industry," he said.

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