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Wed 10 Oct 2007 11:47 AM

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Global commodity prices hit Savola profit

Saudi's largest food firm sees Q3 net income plunge 72% after capital gain last year.

Savola Group, Saudi Arabia's largest food company, said third-quarter profit plunged 72% after a capital gain last year, and warned higher international commodity prices would hurt earnings.

Net income in the three months to September 30 was 151.4 million riyals ($40.37 million) and the capital gain in the year-earlier period 371 million riyals, the Gulf's second-biggest sugar refiner said in a statement on the Saudi bourse website.

Savola earned 533.78 million riyals in the year-earlier period, according to Reuters data, implying a 7% decline in third-quarter profit after discounting the capital gain.

Higher international commodity prices, such as for edible oil, had a "small" impact on third-quarter profit and will hurt earnings in the three months to December 31, Savola said, without being more specific.

The company will try to absorb as much of the price rises as it can to minimise the impact on customers, it said.

Earnings per share in the nine months to September 30 rose to 2.81 riyals from 2.45 riyals in the year-earlier period, it said.

Bakheet Investment Group forecast a 67.8% drop in third-quarter profit, according to a Reuters survey last month.

Shares of Savola have fallen 20% this year, compared with a 1.55% decline in the main stock index. - Reuters

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