Agthia’s net profit rises 22% on higher revenue in 2014

Revenues rose nine per cent to Dh1.66 billion and boosted the net profit to Dh193.3 million in the year, the company said in a regulatory filing to the Abu Dhabi Securities Exchange.

Abu Dhabi — Abu Dhabi Food Company or Agthia Group, an Abu Dhabi-based food and beverage producer, registered 22 per cent more profits in 2014 compared to the previous year.

Revenues rose nine per cent to Dh1.66 billion and boosted the net profit to Dh193.3 million in the year, the company said in a regulatory filing to the Abu Dhabi Securities Exchange.

“The strong growth in profits was driven by higher sales and strong margin improvements,” said the food company.

General Holding Corporation or Seenat, an Abu Dhabi government-owned company, owns a 51 per cent stake in Agthia, while the remaining shares are held by individual and institutional investors. Agthia’s assets are located in the UAE, Egypt and Turkey. The company manages a portfolio of integrated businesses providing food and beverage products to customers across the UAE, GCC, Turkey and the wider Middle East.

Gross profit margins rose 90 basis points to 28 per cent, reflecting an aggressive focus on the competitive sourcing of grains, ongoing cost saving initiatives, in-house production of previously outsourced animal feed and stable flour pricing in the Northern Emirates.

Dhafer Ayed Al Ahbabi, chairman of Agthia Group, said: “2014 has been another strong year for Agthia, with new product launches, the installation of a new water bottling line and the commencement of production of frozen baked goods.”

The year saw Agthia’s distribution centre becoming fully operational. “We are well placed to further grow our business by expanding our product portfolio and distribution reach going forward,” the chairman said.

Assets grew 13 per cent to Dh2.215 billion, chiefly owing to investments in property, plant and equipment and increase in inventories and other current assets.

Iqbal Hamzah, CEO of Agthia, said that Agthia consolidated its leadership position in key product categories. “We have built a solid platform to accelerate the development of our business, and I am confident that 2015 will be another successful year for the company,” the chief executive said.

The agri business, which manufactures and distributes Grand Mills flour and Agrivita animal feed products, recorded net profit of Dh201 million, an increase of 17 per cent year-on-year.

Sales rose eight per cent from 2013 to Dh1.04 billion, driven particularly by animal feed products as government initiatives to promote food security encouraged domestic food production, creating favourable conditions for the segment. 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 net profit of Dh57.3 million, 10 per cent higher than 2013.

Sales increased by 12 per cent over the previous year to Dh616.6 million, primarily driven by the water segment, and specifically the accelerated recovery of volumes in the second half of the year following the installation of the new high-speed bottling line.

— haseeb@khaleejtimes.com