UAE-based Agthia Group, a top F&B company, has posted a net profit of Dh59.2 million ($16.1 million) for the first quarter of 2015, up 22 per cent from the same period in 2014 due to higher sales, improved margins and controlled overheads.

Net sales for the period grew 11 per cent to Dh434.9 million ($118.3 million).

Dhafer Ayed Al Ahbabi, chairman of Agthia Group said: “Agthia has made a strong start to the year. We continue to progress with our strategy of driving growth across all core categories, improving profitability, diversifying and launching new products, expanding distribution reach, strengthening brand support and, at the same time, addressing underperforming businesses.”

Iqbal Hamzah, chief executive officer of Agthia, added: “The business has performed strongly in this first quarter, paving the way for another year of growth for Agthia.”

“We have made good progress delivering on our primary objectives, such as growing revenues, driving profitability and improving the performance of Capri Sun and our dairy category. With robust business fundamentals in place, and strong execution of our strategy, we aim to deliver encouraging returns to our shareholders,” he added.

Agri business

The Agri Business, which manufactures and distributes Grand Mills flour and Agrivita animal feed products, saw net profit for the first quarter of 2015 increase 12 per cent year-on-year to Dh65.9 million, primarily driven by Agrivita which saw an overall increase in distribution. Net sales rose 6 per cent to Dh276 million, a company statement said.

Consumer business

The Consumer Business, which produces and distributes consumer brands including Al Ain Bottled Water, Alpin Natural Spring Water, Yoplait fresh dairy products and Capri Sun juices, recorded a net profit of Dh10 million for the quarter, a 32 per cent increase from the same period in 2014, according to the statement.

Net sales reached Dh158.9 million, a growth of 22 per cent year-on-year. The installation of the Al Ain high-speed bottling line last year, which expanded capacity by 60 per cent, combined with increased margins resulting from lower PET usage and cost and production efficiency, helped drive profits in the division.

The unit’s water and beverage segment was driven by Al Ain Water, which took the lead in terms of volume market share in the UAE. To meet current and expected demand, the Group is adding a second high speed bottling line, which will be ready by mid-2016, increasing the existing capacity by about 40 per cent, and expanding its distribution centres in Abu Dhabi and Dubai.

In the food segment, the dairy business gross margin has improved significantly and the Group will continue to improve the profitability of this business by reducing costs, and adjusting product and distribution strategy. The Frozen Baked category saw nearly 50 SKUs prepared in the quarter and customer acquisition is in progress, the statement said.

At the start of the year, Agthia signed an agreement with Monty’s Bakehouse UK to manufacture their products for global airlines, which is on track for launch in Q3. Meanwhile, the Egyptian business is continuously improving, according to the statement.

The tomato paste line became fully operational following its transfer from the UAE and the Group is also exploring a number of potential opportunities to expand its operations and market presence there, the statement said.- TradeArabia News Service