UAE food giant posts 32% rise in Q1 net profit

Agthia also sees increase in net sales during first quarter; plans to launch new products in new markets
UAE food giant posts 32% rise in Q1 net profit
(Photo for illustrative purposes only)
By Andy Sambidge
Fri 02 May 2014 09:57 AM

One of the UAE’s biggest food and beverage groups has posted a 32 percent increase in net profit the first quarter of 2014 compared to the year-earlier period.

Agthia Group said its Q1 net sales rose by eight percent to AED390.1 million ($106 million), driving net profit to AED49 million.

The company said in a statement that the results were driven primarily by higher net sales and an overall improvement in margins.

Rashed Mubarak Al Hajeri, chairman of Agthia Group said: "The year has started off well, with firm sales and profit gains which position Agthia for another strong year.

"We will continue to maximise the UAE's growth potential while also exploring growth opportunities in new geographies and introducing new products."

Its agri business division, which manufactures and distributes Grand Mills flour and Agrivita and animal feed products, recorded net sales of AED259.7 million in the first three months of 2014, up 11 percent. Net profit was AED58.8 million, an increase of 35 percent year-on-year, resulting from higher volumes and improved margins.

The company added that its consumer business division, which produces and distributes products including Al Ain Mineral Water, Yoplait fresh dairy products and Capri-Sun juices, saw net sales of AED130.5 million in the first quarter, an increase of 3 percent.

However, the net profit for the division decreased by 19 percent to AED7.6 million due to temporary marginal sales growth in bottled water owing to capacity constraints, an unfavourable channel mix of bottled water sales, a decline in Capri Sun volumes, and higher overhead costs.

"Performance is expected to improve following the commissioning of new high speed bottling line in Q2 and the introduction of a new Capri Sun product mix later in the year," the statement said.

Ilias Assimakopoulos, CEO of Agthia, added: "Our balance sheet is strong and can support our expansion plans, and we expect 2014 to be another growth year for Agthia."

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