Agthia Group, the Abu Dhabi-based food and beverage company, has reported a net profit of AED254.3 million ($69.2 million) for 2016, up 10 percent on the previous year.
Net revenues grew 8 percent to AED2.01 billion, led by the group’s flagship water business, the company said in a statement, adding that it expects the market to remain "tough" this year.
In 2016, Agthia’s two other largest businesses, flour and animal feed, were subject to a change in the subsidy regime that has been in place since 2007 in Abu Dhabi.
The group said it responded to these changes by immediately deploying initiatives to protect volume, ranging from the introduction of more competitive product lines to expanding distribution in especially the northern emirates and export markets, which helped partially mitigate the adverse impact on volume and profits.
Dhafer Ayed Al Ahbabi, chairman of Agthia, said: "Despite economic headwinds, Agthia performed strongly in 2016 with our business strategy generating double digit profit growth underpinned by higher sales.
"While it is clear that the environment in 2017 will remain tough as we confront external cost challenges, our core business fundamentals are robust. We will continue to focus on regional expansion and investment opportunities to grow sales, increase market share and deliver on our ambition to become the leading food and beverage company in the region."
Tariq Al Wahedi, acting CEO of Agthia, added: "Led by the strength of our brand portfolio, we have again delivered strong profit and revenue growth in what continues to be a tough market.
"Our aim to deliver value for shareholders is best seen through the development of our water business, which continues to be a key driver of growth. Although we have a proven strategy and initiatives in place to maintain this growth momentum, we are realistic about the current economic environment and the challenges that lie ahead."
Agthia said it is pursuing a five-year strategy aimed at becoming one of the Middle East’s leading food and beverage companies, the cornerstone of which is expanding the group’s water business.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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