Agthia Group, a leading food and beverage group in the UAE, has reported net profit of Dh118 million ($32.12 million) for the first half of 2017, while net revenue grew 2.2 per cent from the same period of 2016 to reach Dh1.07 million ($291,315).

The higher revenue was led by the group’s flagship water business, buttressed by the recently acquired Delta Water in Saudi Arabia, and the growing market share of the breakthrough “no-sodium” Al Ain Zero which propelled overall Al Ain water market share to 27 per cent, said a statement from the company.

Initiatives to contain the impact of subsidy rationalisation on the flour and animal feed businesses continued to bear fruit as the company adapted to the utility tariff increases introduced at the beginning of the year and the ongoing challenging macroeconomic climate, it said.

Eng Dhafer Ayed Al Ahbabi, chairman of Agthia, said: “Our management continues to demonstrate its commitment to deliver the best value to shareholders no matter the circumstances.”

“While the economic conditions that have prevailed so far in 2017 continue to challenge our operations, we are exercising formidable efforts to support our businesses, and I am confident that the strength of our brands will continue to drive growth,” he said.

Tariq Al Wahedi, chief executive officer, Agthia, said: “The launch of Al Ain Zero 5-Gallon in the second quarter showed that we are committed to leveraging the impressive performance of our water business, which, as the market leader in the UAE, has become a national champion, and complemented by the performance of the Delta Water business in Saudi Arabia, drove the steady increase in Agthia revenues.”

“We are optimistic about further stability in our other core categories in the second half owing both to our relentless efforts to be innovative, and the range of initiatives already in the pipeline for execution,” he said.

Flour contributed Dh219 million ($596.2 million) in revenue, 2.3 per cent lower than the previous year, reflecting aggressively competitive market conditions following the subsidy rationalisation that began in the second half of 2016.

Still, thanks to a suite of actions that includes price increases, the introduction of low-cost value-range products, loyalty programmes, and the launch of ‘bakery ingredients’ products for bakeries, the company has been remarkably successful in adapting its business models to changing conditions.

Animal feed recorded net revenue of Dh293 million ($79.7 million), 19 per cent lower than last year, in a mostly unsubsidised market for one full year by now, it said.

Most of the shortfall, however, is attributable to the concentrated pellet tender by the government that has not taken place yet, as the company adapts effectively to new market conditions through innovative new products and cost optimization efforts, it stated. – TradeArabia News Service