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THE SAVOLA GROUP ANNOUNCES THE INTERIM FINANCIAL RESULTS FOR THE PERIOD ENDED ON 30/06/2020 (SIX MONTHS)

Element ListCurrent QuarterSimilar quarter for previous year%ChangePrevious Quarter% Change
Sales/Revenue 6,007.15,812.73.3445,922.91.421
Gross Profit (Loss) 1,278.71,163.29.9291,2234.554
Operational Profit (Loss) 584.6363.760.736408.543.108
Net Profit (Loss) after Zakat and Tax 409.6110.2271.687172.8137.037
Total Comprehensive Income 274.6100174.619.41,315.463
All figures are in (Millions) Saudi Arabia, Riyals
Element ListCurrent PeriodSimilar period for previous year%Change
Sales/Revenue 11,93011,026.68.192
Gross Profit (Loss) 2,501.72,228.612.254
Operational Profit (Loss) 993.1569.574.381
Net Profit (Loss) after Zakat and Tax 582.3116.6399.399
Total Comprehensive Income 294110.4166.304
Total Share Holders Equity (after Deducting Minority Equity) 7,7247,237.86.717
Profit (Loss) per Share 1.090.22
All figures are in (Millions) Saudi Arabia, Riyals
Element ListExplanation
Increase (Decrease) in Net Profit for Current Quarter Compared to the Same Quarter of the Previous Year is Attributed to The net profit for the current quarter has increased by 271.7% to reach SAR 409.6 million in comparison to SAR 110.2 million for the quarter ended 30 June 2019.

The increased profit is mainly attributed to the following:

- Increase in the gross profit is mainly due to the higher sales and margins in retail and frozen foods sectors;

- Higher share of profit from associates;

- Lower operating expenses and net finance cost due to decrease in the financial charges on borrowings;

The net profit was achieved despite of the following:

- Higher zakat and tax expense; and

-A non-recurring zakat and tax provision reversal relating to prior years assessments was recorded in the quarter ended 30 June 2019.

Increase (Decrease) in Net Profit for Current Quarter Compared to the Previous Quarter is Attributed to The net profit for the current quarter has significantly increased to SAR 409.6 million in comparison to SAR 172.8 million for the quarter ended 31 March 2020.

The increased profit is mainly attributed to the following:

-Increase in the gross profit is mainly due to the higher sales and margins in retail and frozen foods sectors;

-Higher share of profit from associates;

-Lower operating expenses and net finance cost due to decrease in the financial charges on borrowings.

The net profit was achieved despite of the higher zakat and tax expense.

Increase (Decrease) in Net Profit for Current Period Compared to the Similar Period of the Previous Year is Attributed to The net profit for the first half 2020 has significantly increased to SAR 582.3 million in comparison to SAR 116.6 million for the period ended 30 June 2019.

The profit achieved is mainly attributed to the following:

-Increase in the gross profit is mainly due to the higher sales and margins in retail and frozen foods sectors.

-Higher share of profit from associates.

-Lower operating expenses and net finance cost due to decrease in the financial charges on borrowings.

The net profit was achieved despite of the following:

- Higher zakat and tax expense; and

-A non-recurring zakat and tax provision reversal relating to prior years assessments was recorded in the period ended 30 June 2019.

Basis of the External Auditor's Opinion Unmodified opinion
Reclassification of Comparison Items Items, elements and notes of the comparatives Condensed Consolidated Interim Financial Statements have been redisplayed, regrouped and reclassified to meet with the applied accounting policies for the current period, which have been prepared according to the International Financial Reporting Standards (IFRS) that are endorsed in the Kingdom of Saudi Arabia. For more information, please refer to note 16 (Amendments to standards and standards issued and not yet effective) in the Condensed Consolidated Interim Financial Statements for the period ended June 30, 2020 and June 30, 2019.
Additional Information In this regard Eng. Anees Ahmed Moumina- Savola Group CEO, highlighted “the strong results for this quarter and the six-month period ended 30 June 2020, were in line with our strategy and our commitment to the retail and food business, while simultaneously focusing on optimizing our asset allocation, and adapting our investment strategy to dynamic markets in Saudi Arabia and abroad. Our restructuring approach, which prioritized innovation while also focusing on group-wide cost rationalization and efficiencies, yielded excellent results last year and the current period. These achievements are accomplished while actively managing the risks and implications of Coronavirus (COVID-19) and its impact on our operations in light of the local and worldwide market and economic conditions in the countries in which the Group operates”.

The existence of (COVID-19) and its continuation since early 2020 and its spreading across multiple geographies, has caused disruptions to businesses and economic activity. In response to the spread of (COVID-19) and its resulting disruptions to the social and economic activities, the task force established by the Group continues its mandate to assess the possible impact on its business in Saudi Arabia and the other geographies where the Group operates. The management has also taken a series of preventive measures to ensure the health and safety of our employees, customers and wider community as well as to ensure the continuity of operations.

Since the extent and duration of such impacts remain uncertain and dependent on future developments which cannot be accurately predicated at this time, the management and those charged with governance will continue to monitor the potential risks around supply of material, manpower, inventory levels and interruptions to the production facilities across all geographies and accordingly update stakeholders for material deviations, as per local regulatory requirements.

We would like to inform the investors and shareholders that the condensed consolidated interim financial statements of the Group for the period ended June 30, 2020 will be uploaded on Savola website after submitting it to the concerned authorities, and can be accessed through the following link:

http://www.savola.com/SavolaE/Financial_Reports.php

The Capital Market Authority and the Saudi Stock Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.

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