reports
- Nauman Khan
Extra and Panda, a game-changing strategic MoU
Extra and Panda, a game changing strategic MoU * Extra announced its strategic MoU with Panda Retail (Savola’s retail arm) to manage the Electronics and Home Appliances sector of Panda. * A strategic cooperation between the companies over the mid to long term is aimed to be made, supported by Extra’s leading position in the electronics retail sector, and Panda’s large retail chain in Saudi. * Extra said that the cooperation strengthen the company’s strategic expansion plans. O...
- Nauman Khan
Savola | Q4 Update | Panda’s revival remains vital
We remain Overweight on Savola with a revised PT SAR31.5. We expect Savola’s profits to grow at a 3-year normalized CAGR of 20.8% between 2021 to 2024f (ex-impairments in 2021) despite uncertain macro-economic conditions. We believe Savola’s execution of its CXR Program for the revival of Panda will be the key growth catalyst. Savola, being a market leader in Saudi, also stands to benefit from initiatives to improve food security. The stock trades at 2023f P/E of 15.7x at a premium compared t...
- Nauman Khan
Savola: Q3 22 Results Analysis | Lowest gross margins since 2016
Savola reported a net profit of SAR164mn in Q3 22 up 33.7% yoy ( -23.5% qoq). This is lower than the SNB Capital and consensus estimates of SAR192mn and SAR214mn respectively. We believe the variance is due to 1) lower than expected gross margin and 2) higher than expected operating expenses. This was partly offset by higher-than-expected revenues. The yoy growth in earnings were due to 1) higher gross profit due to improved food processing margins and 2) higher share of profits from associat...
- Nauman Khan
Savola: Earnings call summary – Savola Q2 22
BUSINESS PERFORMANCE * Revenues came in at SAR6.89bn, up 16.7% yoy (-8.0% qoq). * Food processing revenues increased by 53.8% yoy to SAR4.1bn, while revenues of Panda declined by 14.5% yoy to SAR2.5bn. Food services revenue declined by 9.4% yoy and frozen foods grew by 4.4% yoy. * By geography, Saudi constituted 64% of total sales in H1 22 followed by Egypt, Central Asia, and others at 16%, 6% and 14%, respectively. Saudi as a % of total sales declined from 69% in H1 21 to 64% in...
- Nauman Khan
Savola: Weak sales partially mitigated by higher margins
Savola reported a net profit of SAR214mn in Q2 22, up 6.9% yoy (-21.1% qoq). This is lower than the SNB Capital and consensus estimates of SAR232mn and SAR220mn, respectively. We believe the variance is due to 1) lower revenues which came in 4.7% lower than our estimate and 2) higher than expected non-opex mainly due to higher financing and zakat expenses. This was partially offset by higher than expected gross margins. * Revenue stood at SAR6.88bn, up 16.7% yoy, (-8.0% qoq). However, it was...
- Nauman Khan
Savola: Q1 22 earnings call summary
BUSINESS PERFORMANCE * Revenues came in at SAR7.49bn up 25.8% yoy (+11.0% qoq). * Food processing revenues increased 48.9% yoy to SAR4.3bn while revenues of Panda grew 3.2% yoy to SAR2.8bn. Food services and frozen foods grew 6% yoy and 5% yoy, respectively. * By geography, Saudi constituted 65% of total sales followed by Egypt, Central Asia, and others at 17%, 5% and 13%, respectively. Saudi as a % of total sales declined from 69% in Q1 21 to 65% in Q1 22. * Ramadan-related s...
With a more favourable environment, SAVOLA GROUP improves to Slightly ...
SAVOLA GROUP (SA), a company active in the Food Products industry, is favoured by a more supportive environment. The independent financial analyst theScreener has confirmed the fundamental rating of the title, which shows 3 out of 4 stars, as well as its unchanged, moderately risky market behaviour. The title leverages a more favourable environment and raises its general evaluation to Slightly Positive. As of the analysis date March 11, 2022, the closing price was SAR 33.90 and its potential was...
- Nauman Khan
Savola: Lowest gross margins since 2016
Savola reported a weak set of Q3 21 results with a net income declining by 56.9% yoy (-38.8% qoq) to SAR122mn. This is lower than our estimates of SAR220mn. Although overall revenue increased 31.9% yoy (+2.5% qoq) to SAR6.05bn, we believe this was offset by multiple factors including 1) lower gross margins in the retail sector 2) higher opex 3) lower profits from associates and 4) higher zakat and taxes. In Q3 21, the net profit from the food services segment increased by 275% yoy, whereas th...
- Nauman Khan
Savola: Q2 21 review – Weak results on lower margins
Savola reported a net income of SAR200mn, declining by 51.2% yoy (+30.0% qoq) and came lower than our estimates of SAR237mn. Revenues of SAR5.9bn (-1.8% yoy, -0.9% qoq) were in-line with our estimates while the variance is mainly due to lower than expected gross margins of 18.9% vs 21.3% in Q2 20 and our estimate of 20.2%. We believe the variance in margins is due to lower margins in Panda and Frozen Foods segments. * Revenues stood at SAR5.9bn (-1.8% yoy, -0.9% qoq), in-line with our estima...
- Nauman Khan
Savola: Weak results on lower sales and higher opex
Savola reported a weaker-than-expected set of Q4 20 results, with net income declining -67.4% yoy to SAR44.7mn. This is significantly lower than our estimates of SAR216mn. The variance is due to combination of lower than expected revenue (-0.9% yoy), and higher than expected opex. We note that Q4 19 revenues were restated downward to SAR5.23bn from SAR5.5bn. The company also announced a DPS of SAR0.75 for 2020f, broadly inline with our expectation of SAR0.8 and higher than SAR0.3 paid in 2019...
- Nauman Khan
Savola: Record-high margins offset top-line declines
Savola reported a mixed set of Q3 20 results with a net income of SAR284mn (+27.9% yoy, -30.7% qoq). This is higher than the NCBC estimates of SAR265 but in-line with the consensus estimates of SAR281mn. We believe the decline in revenues (-10.9% yoy) to SAR4.59bn (vs our estimates of SAR5.66bn) was offset by 1) higher than expected gross margins, 2) lower operating expenses and 3) lower finance and zakat expenses. We are Neutral on Savola with PT of SAR46.3. While weaker-than-expected top-li...
- Nauman Khan
Savola: Panda revival remains the key growth driver
We remain Neutral on Savola with an increased PT of SAR46.3. We believe the turnaround of Panda remains a key growth driver, which is expected to benefit mainly from higher demand for groceries in the near term, and from consolidation gains and a strong distribution network over the medium to long term. However, we expect the food segment to show muted going forward given the pressure on the food commodity prices. Turnaround of Panda well on track: In Q1 20, Panda recorded sales growth of +23...
- Meriem KADDOUR
The worst is still not over yet
During Q1 2017, sales dropped by -9.2% to SAR5.833bn vs. SAR6.422bn by the end of March 2016. The gross income fell by 18.3% to SAR1.04bn vs. SAR1.273bn, a year earlier. Thus, the gross margin reached 17.8% vs. 19.8%, a year ago. The operating income significantly decreased by 58.9% to SAR138.927m vs. SAR338.285m, a year earlier. Therefore, the operating margin reached 2.4% vs. 5.3%, yoy. The net profit collapsed to reach only SAR4.778m vs.
- Meriem KADDOUR
A Q4 earthquake
Q4 2016: Revenues almost stagnated (-0.16%) at SAR6.250bn vs. SAR56.260bn, yoy. The gross income sharply declined by -40.73% to SAR755.10m, a steep decline to 12.08% vs. 20.39%, a year ago. The net profit also dropped sharply to maintain its negative territory of SAR-964.3m vs. SAR515.30m, a year earlier. By the end of December 2016: Revenues slightly went down by -0.4% to SAR25bn vs. SAR25.1bn by the end of December 2015. The gross income fell by 11.95% to SAR4.425bn vs.
Ford Equity International Rating and Forecast Report
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
- Meriem KADDOUR
Profits are melting like an ice in the sun
Q3 2016: Revenues increased by 4.34% to SAR5.846bn vs. SAR5.604bn, yoy. The EBIT slumped by 36.99% to SAR311.278m following an important increase of operating costs (+8.29%). Therefore, the operating margin reached 5.32% vs. 6.63% a year ago. The net profit dropped sharply by 53.32% to SAR173.438m. By the end of September 2016: Revenues witnessed a near-stagnation (-0.55%) to SAR18.759bn vs. SAR18.863bn by the end of September 2015. The EBIT fell by 28.16% to SAR1.109bn vs. SAR1.407bn, a year e...
SAVOLA, the king of sorrow
Q2 2016: Revenues dropped by 2.08% to SAR6.890bn vs. SAR7.036bn, yoy. The EBIT slumped by 23.68% to SAR414.194m. Therefore, the operating margin reached 6.01% vs. 7.71%, a year ago. Net profit accused a sharp drop of 49.5% to SAR230.328m following the increase of financial charges (+134%) and the loss from discounted operations related to the United Sugar Company in Egypt which totalized SAR-42.256m. H1 2016: Revenues decreased by 2.62% to reach SAR12.913bn vs. SAR13.260bn by the end of June 201...
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