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Agthia posts 14% surge in net sales
Agthia Group, a leading food and beverage company, on Thursday posted net sales of Dh1.14 billion, a 14 per cent year on year growth.
However, Agthia’s net profit dropped 25 per cent to Dh 86 million due to higher soft commodity and PET (polyethylene terephthalate) prices, the company said in a statement.
Over the last five years, Agthia has achieved a Compounded Annual Growth rate of 21.4 per cent in sales revenue and 24.3 per cent in net profits. Board of Directors has recommended a cash dividend of five per cent.
The results highlight the strong performance of Consumer Business Division, which recorded an 18 per cent net sales growth to Dh 376.9 million and Agri Business Division, which manages the flour and animal feed business, delivering a 12 per cent net sales growth to Dh 767.4 million, a company statement said.
In 2011, the company launched fresh dairy products under the “Yoplait” brand, long shelf life 100 per cent natural fruit juice under the “Chiquita” brand, and fresh fruit juices under the “Al Ain Fresh” brand.
In December last year, Agthia announced the acquisition of Pelit Su, a Turkey based natural spring water bottling plant with direct access to a natural spring water source. The company has taken over management control of the Turkish entity and has completed 100 per cent equity acquisition in March 2012, with plans to expand its regional distribution footprint in Turkey. “This strategic venture will also facilitate the company’s entry into higher margin premium natural spring drinking water in the UAE and other geography,” the statement said.
Rashed Mubarak Al Hajeri, Chairman of Agthia Group, said 2011 was a challenging period for food and beverage manufacturers due to increasing input costs and regional unrest. “Nevertheless, our business fundamentals remain strong as evident by the strong sales and volume growth across all categories during 2011 and this performance is consistent with our long term growth model.”
Ilias Assimakopoulos, chief executive officer of Agthia Group, said Agthia’s investments remained focused on growth opportunities, while it continued addressing the challenge of higher input costs by pursuing cost savings initiatives, pricing opportunities, and by accelerating entry into new categories. “We view such entries into new segments as strategic growth drivers and will contribute to Agthia’s ambition of becoming the UAE’s leading food and beverage group.”
The Abu Dhabi-based group said its strong net sales growth of Dh1.14 billion was attributable to solid performance of water and beverages business that delivered 21 percent sales growth, and the flour and animal feed business showing a 12 percent sales growth. “This rise in sales was primarily driven by volume increases, pricing and distribution expansion,” it said. Agthia said the decline in total net profit resulted mainly from a four percentage point drop in gross profit margin attributed to a continued increase in input cost of raw materials.
· issacjohn@khaleejtimes.com
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