Savola, which owns the Middle East's biggest sugar refining business and produces edible oil, made net profit of 283 million riyals ($75.5 million) in the three months to end-September, up from 277.9 million riyals a year earlier, it said in a bourse statement.

That is below an average net profit of 312.1 million riyals, a rise of 12.3 percent, forecast by six analysts in a Reuters survey.

Savola will offer shareholders a 0.25 riyals per share dividend for the third quarter of 2010, it added.

Sales rose 10 percent to 5.6 billion riyals in the quarter.

"An increase in global prices of raw sugar had a negative impact on profitability margins," Savola said.

It also attributed the decline to start-up costs of new  outlets in its Panda-Azizia supermarket chain.

Savola shares were down 2.03% at 33.70 riyals at 1040 GMT.

"In summary, we believe the numbers are relatively disappointing with net income ... 7 percent below our estimates due to a combination of lower than anticipated top-line growth and increased food costs," NCB Capital said in an emailed note.

The drop in gross margins because of higher global food prices highlighted a key risk for food producers such as Savola, NCB Capital said.

"To an extent, its financial performance is dependent on movements in the global commodity markets," it said in the note.

Savola said it expects to make 230 million riyals in net profit before capital gains during the fourth quarter, 14.5 percent below the net profit it made a year earlier.

It maintained a net profit forecast for the full year of 920 million riyals, excluding capital gains, 3.4 percent below the net profit it made in 2009.

Savola is the biggest shareholder in Almarai Co., the Middle East's largest dairy firm by market value.