Agthia Group, one of the UAE’s leading food and beverage groups, has reported a net profit of Dh151 million ($41 million) for the first nine months of the year, marking a 26 per cent rise driven primarily by higher sales and improved margins.

Net sales increased by 9 per cent to Dh1.2 billion ($326.6 million) for the first nine months of 2014 compared to the same period last year.

Dhafer Ayed Al Ahbabi, chairman of Agthia Group, said: “We have seen a strong performance of the group in this quarter and the business is well positioned to sustain strong performance in quarters to come, both through organic growth and by seizing opportunities that arise in the UAE and in other markets.”

Iqbal Hamzah, chief executive officer of Agthia, said: “Without doubt this period has further consolidated the strong year Agthia has had so far, with both the Consumer and Agri Business Divisions continuing to perform well. We are addressing areas of underperformance and remain focused on driving the profitable growth of core businesses, while diversifying our product portfolio and widening our distribution reach.”

The Agri Business Division, which manufactures and distributes Grand Mills flour and Agrivita animal feed products, recorded net sales of Dh782.3 million ($198.2 million) in the period, up nine per cent on the same period in 2013.

This outcome was largely driven by volume growth of 17 per cent year-on-year of poultry and large animal feed, supported by government initiatives to promote food security and encourage domestic food production which created favourable conditions for the segment.

Net profit for Agri Business was Dh156.1 million ($41.2 million), an increase of 19 per cent year on year, resulting from higher volumes and improved margins. The improvement in the gross profit margin was the result of competitive sourcing of grains, ongoing cost saving initiatives, a favourable product mix, in-house production of previously outsourced animal feed and stable flour pricing in the Northern Emirates. Further expansion of poultry feed production capacity is underway with completion targeted by the first quarter of 2015.

Third quarter net sales in the Division reached Dh250 million ($68 million), up 11 per cent from the same period in 2013, and net profit rose 17 per cent to Dh42.7 million ($11.6 million).

The Consumer Business Division, which produces and distributes products including Al Ain Mineral Water, Yoplait fresh dairy products and Capri-Sun juices, saw net sales of Dh450 million ($122.4 million) in the first nine months of the year, an increase of 10 per cent over the previous year.

Net profit also increased by 10 per cent to Dh40 million ($10.8 million). Third quarter net sales of Dh159.7 million ($43.4 million) were up by 17 per cent, and profit at Dh17.7 million ($4.8 million) was 22 per cent ahead year-on-year basis.

Within the Division, the Water and Beverage segment achieved net sales of Dh362.3 million ($98.6 million), up 8 per cent, with net profit for the segment increasing 15 per cent to Dh61.4 million ($16.7 million) and volumes increasing by 11 per cent for the same period year on year for the segment.

The growth was primarily driven by the improved performance of bottled water with the new high-speed bottling line helping to overcome previous capacity constraints and capitalising on cost saving opportunities.


The Food segment achieved net sales of Dh87.6 million ($23.8 million) in the first nine months of 2014, an increase of 22 per cent, but recorded a loss of Dh21.4 million ($5.8 million) mainly resulting from input cost pressure and returns, higher marketing investment and the pre-operating costs related to the frozen baked category. The focus remains on improving profitability of the yogurt business by reducing costs, adjusting product and distribution strategy, and rationalizing plain yogurt portfolio.

The frozen baked factory has commenced commercial production and the build-up of stock is in progress. Initially the Group is launching 20 SKUs which will increase to 50 by year end and to over 100 SKUs by 2015.

The Group’s Egypt operation performed in line with expectation for the period, both in terms of sales and profitability. – TradeArabia News Service