DUBAI (Reuters) - Savola Group 2050.SE, Saudi Arabia’s largest food products company, swung to a first-quarter loss, hit by lower sales within food and retail and a higher share of a loss from an associate, it said on Wednesday.
The company reported a net loss of 84.3 million riyals ($22.5 million) in the three months to the end of March 31, compared with a net profit of 4.8 million riyals in the same period a year earlier, Savola said in a statement.
Analysts at EFG Hermes had forecast the company would make a net profit of 41.1 million riyals, while Al Rajhi Capital expected a net profit of 78.0 million riyals.
Savola attributed the loss due to lower sales within food and retail, the higher share of losses from an associate and higher net finance costs. It also said its first quarter 2017 results were boosted by a non-recurring gain from discontinued operations.
Savola, like many other retailers in Saudi Arabia, has struggled in the past few years as consumer spending has been sluggish because of a government austerity drive.
The company is one of the few listed Gulf companies with operations in Iran. It has an edible oil business in Iran, which had revenues of 2.59 billion riyals last year, as well as smaller food and confectionery operations.
The United States has decided to withdraw from the Iran nuclear deal, leading to new U.S. sanctions on Tehran and pressure on the free market rate of the Iranian rial.
Reporting By Tom Arnold. Editing by Jane Merriman