Savola CEO says war impact was ‘limited’, costs increased variably

Savola Group CEO Sameh Hassan

Savola Group CEO Sameh Hassan said the impact of the war on the company’s Q1 2026 results was limited as the conflict began toward the end of the quarter, expecting its effects to become more visible in the second quarter.

In an interview with Al Arabiya, Hassan said the company was prepared for such developments through diversified supply chains and a broad global supplier base, highlighting the success of the group’s transformation and restructuring strategy implemented over the past five years in supporting performance.

He pointed out that Savola mainly relies on Jeddah Islamic Port and shipping routes through the Bab el-Mandeb Strait, in addition to the Green Corridor for supplying goods to Gulf countries, including the UAE, which helped reduce operational disruptions.

The CEO said the war impacted several fronts, mainly supply chains, raw materials, energy and transportation costs, adding that cost increases ranged between 5% and 25%, while some oil-related materials recorded hikes of nearly 50%.

Hassan said the company is absorbing most inflationary pressures while passing on a limited portion to consumers, with a focus on protecting profit margins.

The food manufacturing segment posted notable improvement in Q1, while the retail segment, led by Panda, managed to turn profitable over the past two years, with continued focus on enhancing margins and improving performance.

Hassan noted that all markets in which the group operates are now generating positive returns following the completion of the restructuring process, including Saudi Arabia, the GCC, Egypt, and Algeria, as well as a new partnership with one of Turkey’s largest agricultural groups.

He stated that the Saudi market remains the group’s key pillar, with significant growth in market share across various sectors, including oil and sugar.

Regarding future plans, Hassan said the company continues to review its operations periodically, although most of the restructuring and strategic transformation process has been completed across both the food manufacturing and retail sectors.

He added that the company is currently focused on driving growth, improving operational efficiency, enhancing profit margins, and reducing costs.

The first quarter results already reflect the positive impact of these efforts, with cost-cutting measures continuing since mid-2025, the CEO said.

According to data available with Argaam, Savola Group’s profits rose to SAR 284.5 million in Q1 2026, from SAR 189.2 million in the same period of 2025.