JEDDAH – Savola Group has raised its stake in food firm Almarai Co. to 36.5 percent by purchasing shares worth SR2 billion ($533 million), Savola said in a statement Wednesday. At the same time, the group announced that it achieved a net profit of SR405.2 million during the third quarter of 2012 compared to SR307.9 million during the same quarter last year, an increase of 31.6 percent and compared to SR341.3 million for the previous quarter, representing an 18.7 percent increase. The purchase into Almarai, which increased Savola's holding in the company from 29.95 percent, was “in line with the group's strategy of further growing its exposure in its core sectors, of which the foods sector is one of them,” Abdulraouf M. Mannaa, group managing director at Savola, said in the statement. Savola financed the deal with its own cash reserves and Islamic loan financing provided by local banks. Samba Capital, the investment banking arm of Samba Financial Group, acted as financial consultant on the transaction, the filing to the Saudi bourse added. Net profit for the first nine months of 2012 amounted to SR988.9 million compared to SR703.8 million for the same period last year, with an increase of 40.5 percent. Operational profits during the third quarter reached SR616.8 million compared to SR471.8 million for the same quarter last year at an increase of 30.7 percent. Total operational profits for the first nine months reached SR1.660 million compared to SR1.202 million for the same period last year, or an increase of 38.1 percent. Share profits for the first six months reached SR1.17 compared to SR0.79 for the same period before. Mannaa attributed the increase of profitability during the first three quarters of the year for the period ending Sept. 30, 2012 to good performance of its operations in the foods sector, continued sales growth, and increased market share in its retail sector, sending the group's revenues to SR20.4 billion for the nine months compared to SR18.8 billion for same period of last year, and capital gain of SR46 million due to the sale of Emaar Economic City shares as part of group's strategy to divest non-core investments. The increase in net income for the 3rd quarter compared to the 2nd quarter of this year is due to the reasons mentioned above as well as the seasonal impact experienced every year during this quarter. – SG
