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Thu 2 May 2019 01:59 PM

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Subsidy cuts hit profits of UAE food giant Agthia

Agthia Group sees first quarter net profit fall by 15% after the removal of some government subsidies

Subsidy cuts hit profits of UAE food giant Agthia

UAE-based food giant Agthia Group has reported first quarter net profit of AED40 million ($10.8 million), a 15.2 percent year-on-year fall, after the removal of some government subsidies.

The company, that produces Al Ain water, also reported revenue of AED508 million, representing growth of 3.4 percent compared to the same period in 2018.

Profits in Q1 were impacted by lower subsidy-related income in its flour business as the remaining 50 percent subsidy in bakery was zeroed out in January.

The Abu Dhabi-based company's bottom line was also hit by lower average prices for bottled water.

Agthia said it has launched five new products so far this year in its water and dairy sectors.

Dhafer Ayed Al Ahbabi, chairman of Agthia, said in a statement posted on Abu Dhabi Securities Exchange: "Our core businesses maintained their growth momentum in the first quarter despite persistent market challenges.

"We continue to achieve this success not only through the introduction of innovative new products but through successful diversification of our geographical penetration and product portfolio."

Agthia CEO Tariq Ahmed Al Wahedi added: "Agthia continues to retain a leading market position in multiple sectors, crowned by our continuously growing market share in a heavily competitive UAE water market."

Agthia shareholders also approved a cash dividend of 15 percent for an amount of AED90 million.

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