Abu Dhabi-based Agthia Group has revealed an 85 percent increase in year-on-year profits for the first quarter 2021 as the company continues to chart a course of recovery from the coronavirus pandemic.
CEO Alan Smith (pictured below) told Arabian Business on Tuesday that he was “reasonably pleased” with what he described as a “solid” start to the year, which saw profits of AED50 million ($13.6m), while total revenues grew 17 percent from Q1 2020 to reach AED665.5m ($181m).
It comes after Agthia in March announced annual profits for 2020 fell 74 percent to AED34.5m ($9.4m) from AED137m ($37.3m) in 2019.
Smith said: “We keep using the words cautiously optimistic and I think that’s the right thing. If we look back on Q4 and into Q1 I would say that the retail environment has probably been tougher than we expected across markets and the reason for that is ongoing lockdowns. You think about Kuwait, you think about Saudi Arabia; travel bans and the ability of tourists to visit the UAE. I think in the retail space, obviously we hope to see that improve.”
The group’s consumer-business recorded AED430.5m ($117.2m) in revenues, while the net revenue of the food segment, which includes tomato paste & frozen vegetables, bakery, dairy and trading items, increased by 23.5 percent on continued at-home consumption.
The water & beverage category revenues came in at AED192m ($52.3m), with the 5-gallon home and office distribution business growing its top-line by four percent year-on-year, on favourable sales mix and expanded market share. Meanwhile, Agthia’s bottled water portfolio sustained its market leadership in both volume and value share at 29 percent and 26 percent respectively.
Within the company’s agri-business, revenues reached AED235m ($64m), lagging the sales of 2020 which was driven by a one-time World Food Program order.
Smith said the positive results were driven by Agthia’s aggressive acquisition campaign, which saw them consolidate the Al Foah dates business in the UAE and Al Faysal Bakery & Sweets in Kuwait. Further acquisitions of Nabil Foods in Jordan and Ismailia Investments (Atyab) in Egypt, remain subject to obtaining other regulatory approvals.
According to the financial results, Al Foah contributed AED137m ($37.3m) to the top-line over the opening three months of the year.
“If you look at the acquisitions we’ve made, these are good businesses, they’re not distressed assets. We’re buying good businesses at what we believe are good valuations,” said Smith.
He added that, going forward, the company was looking for opportunities in the Middle East, North Africa and Pakistan, while sectors of interest include snacks, processed protein, convenience foods and future tech, with the company currently looking to launch a plant-based range in Jordan through the Nabil Foods business.
He said: “These are the areas we want to focus on, the geographies we’ve talked about.”
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