Saudi-based Savola Group's first-quarter net profit fell 58 percent it said on Tuesday, blaming higher raw material prices and an increase in expenses, but the company expects earnings to rise next quarter.

Net profit for the three months ending March was 165.2 million riyals ($44.05 million), down from 394 million riyals in the same period last year, the food company said in a statement posted on Saudi Arabia's bourse website.
   
Analysts surveyed by Reuters expected the firm to post an average of 181.66 million riyals for the first quarter. Savola, which owns the Middle East's biggest sugar refining business and produces edible oil, said it expects to make a net profit of 225 million riyals in the second quarter, up nearly 6 percent from the same period last year. It did not give a reason behind its second-quarter forecast.

First quarter net profit also fell because of the group's capital gains from the flotation of fast-food chain Herfy in the same period last year, it said in the statement.   

The firm's board said on Tuesday it approved a first quarter dividend of 0.25 riyals per share.

Savola's sales rose to 5.6 billion riyals from 4.8 billion riyals in the first-quarter, while operating profit for the period fell to 288.3 million riyals from 331.1 million riyals a year earlier. - Reuters