Savola Group, Saudi Arabia's largest food products company, slashed its first-quarter net profit forecast by about half and blamed weak retail sales and currency losses.

Savola, one of the few Gulf companies to publicly disclose earnings' forecasts, reduced its projection to SR178 million ($47.5 million) before capital gain, from its previous forecast of SR360 million.

The company's January and February retail sales were lower than it had forecast, it said on Wednesday.

Earnings have also been hit by the effect of currency devaluations in some countries where Savola operates, it said. It also blamed some "operational difficulties" in its overseas operations.

Most Gulf currencies are pegged to the dollar, and the recent strength of the US currency creates a potential challenge for Gulf companies with significant parts of their business overseas.

Outside the Gulf, the company operates in Egypt, Algeria, Sudan, Iran, Turkey, Morocco, Jordan and Kazakhstan, according to its 2013 annual report.

Savola's management has already started taking measures to mitigate the impact of currency devaluation, the company said, without being more specific.

It would take steps to ensure Savola achieved its full-year operating income targets, the firm added. - Reuters