10/05/2016 05:17 AST
Agthia Group, one of the UAE's leading food and beverage companies, has reported a 14 per cent increase in net profit to Dh68 million in the first quarter of the year on stronger sales.
The food company said its revenue grew 12 per cent to Dh486 million in the period. The higher revenues were driven mainly by water, flour and dairy, supported by a strong contribution from Al Bayan water, the company's most recent acquisition.
Net revenues reached Dh204 million, up 28 per cent over Q1 2015, driven by double digit growth in water and a strong performance in dairy.
Net profit almost doubled to Dh20 million driven by higher sales and better margins as a result of production efficiencies and lower raw material prices.
Agri Business, which manufactures and distributes Grand Mills flour and Agrivita animal feed products, posted net revenues of Dh282 million, a two per cent increase compared to the same period in 2015.
Net profit rose nine per cent to Dh72 million, driven by higher sales in flour and improved gross margin owing to lower commodity prices in addition to improved sales mix.
The consumer business, which produces and distributes consumer brands such as Al Ain Water, Al Bayan 5-Gallon water, Alpin natural spring water, Yoplait fresh dairy products, Capri Sun fruit juices, Al Ain fresh juice and Al Ain tomato paste and frozen vegetables, had a very strong start to the year.
Engr Dhafer Ayed Al Ahbabi, chairman of Agthia, said: "We are at the beginning of a year of execution, following a year of change in 2015. We have made good progress in putting our new strategy into action."
"We maintain our positive outlook for the year due to the ongoing robust performance of our core brands. The company is well positioned to continue to expand its regional presence, market conditions permitting," the chairman said.
Iqbal Hamzah, CEO of Agthia, said: "Agthia has had a very strong start to the year, with strong quarterly profit and a solid revenue growth driven by our core categories. We are starting to see Al Bayan make its anticipated contribution to the growth of our water business, and our agreement with Saudi Arabia's Olayan Group saw us begin distribution of our retail flour products to Saudi Arabia in March. Our balance sheet remains strong and healthy and we are well positioned to execute our new strategy and continue on our growth trajectory."
Agthia has recently announced a joint venture partnership with Kuwait's Al Wafir Marketing Services Company to establish a water bottling plant in Kuwait. The plant is expected to commence operations by the second half of 2017 and will mainly produce water under Agthia's flagship brand of Al Ain.
Khaleej Times
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