DUBAI / Reuters
A surge by major food maker Savola helped Saudi Arabia’s stock market outperform a generally sluggish region on Tuesday, while Air Arabia jumped in Dubai on its second-quarter earnings. The Saudi stock index rose 0.5 percent as Savola, which had been in an uptrend for the last few days, gained 4.0 percent in its heaviest trade for over a month.
Savola climbed despite reporting that quarterly profit dropped to 229.3 million riyals ($61.1 million) from 253.5 million riyals a year ago, as sales declined. The profit slide appeared to be partly due to contracting retail margins, analysts at NCB Capital said. They calculated that adjusting for a one-off gain of 62 million riyals from the sale of its Hyper Panda store in Dubai, Savola’s adjusted net income was 167 million riyals, down 34.0 percent. They said this was lower than consensus estimates of 189 million riyals, though in line with NCB’s 170 million riyal forecast. Najran Cement fell 0.3 percent after reporting a quarterly loss of 4.2 million riyals versus a year-earlier profit of 33.9 million riyals.
Al Tayyar Travel gained 0.6 percent despite reporting that second-quarter net profit fell to 212 million riyals from 297 million riyals a year ago, missing forecasts of 229 million riyals and 237.5 million riyals by NCB Capital and Aljazira Capital. In Dubai, the index fell 0.3 percent but Air Arabia gained 5.6 percent in its heaviest trade since February, accounting for over a third of the entire market’s trading volume. The budget airline reported a 19.2 percent rise in second-quarter net profit to 150.7 million dirhams ($41.03 million). EFG Hermes and SICO Bahrain had forecast 95.9 million dirhams and 96.3 million dirhams.
U-Capital noted the airline had been able to reduce costs despite an increase in oil prices on a year-on-year basis, and called its second-quarter load factor of 79 percent “impressive”.
Amlak Finance dropped 1.8 percent despite reporting that it had swung to a small second-quarter profit from a year-earlier loss. Qatar’s index rose 0.3 percent as the largest bank, Qatar National Bank, added 1.0 percent and Doha Bank climbed 0.8 percent.