- Water continued to drive growth, reinforced by recent Saudi acquisition
- Initiatives to address the impact of subsidy rationalization bear fruit
ABU DHABI, July 27, 2017: Agthia Group PJSC, one of the UAE’s leading food and beverage groups, has reported net profit of AED 118 million for 1H 2017, while net revenue grew 2.2 percent from 1H 2016 to reach AED 1.07 million.
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 percent. Initiatives to contain the impact of subsidy rationalization 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.
HE Eng. Dhafer Ayed Al Ahbabi, Chairman of Agthia, said: “Agthia 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 Agthia’s brands will continue to drive growth.”
Tariq Al Wahedi, Chief Executive Officer of Agthia, added: “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.”
Flour contributed AED 219 million in revenue, 2.3 percent lower than the previous year, reflecting aggressively competitive market conditions following the subsidy rationalization 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 programs, 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 AED 293 million, 19 percent lower than last year, in a mostly unsubsidized market for one full year by now. 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.
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Agthia Group is a leading Abu Dhabi based food and beverage company. Established in 2004, the Company is listed on the Abu Dhabi Securities Exchange (ADX) and has the symbol “AGTHIA”. 51 percent of the Company’s shares are held by Senaat (General Holding Corporation), an Abu Dhabi Government entity, with the balance held by retail and institutional investors. The Company’s assets are located in the UAE, Saudi Arabia, Oman, Egypt and Turkey. Agthia offers a world class portfolio of integrated businesses providing high quality and trusted food and beverage products for customers and consumers across the UAE, GCC, Turkey and the wider Middle East. More than 4,000 employees are engaged in manufacturing, distribution and marketing various food and beverage products: Water (Al Ain, Al Bayan, Alpin natural spring water, Delta, Bambini); Flour (Grand Mills); Animal Feed (Agrivita, Al Wasmi); Juices (Al Ain Fresh, Capri Sun); Dairy (Yoplait). An Emerging Businesses unit includes tomato paste, frozen vegetables, fruit puree, and baked goods. For more information: www.agthia.com | Ozgur Serin | Agthia Group | Tel: 971 2 506 0600 | email@example.com | Tom Drummond | Brunswick Group | Tel: 971 54 305 6609 | firstname.lastname@example.org