Agthia Group reports first quarter financial results

Agthia Group., one of UAE’s leading food and beverage groups, today released the Company’s financial results for first quarter ended 31 March 2012. Agthia delivered a strong volume, sales and profit growth in the first three months of 2012, achieving a 12% increase in net sales year on year, reaching AED 311 million and a strong profit growth of 21% at AED 27 million. 

Among the highlights of the first quarter of 2012, Agthia’s Consumer Business Division achieved net sales growth of 17% year on year while the Agri Business Division grew by 10%. The newly launched Yoplait fresh dairy products and Chiquita natural juices are progressing well; priority remains to drive distribution penetration across all retail segments while building strong in store presence and visibility. The response to the range of newly launched Al Ain fresh juices continues to be encouraging and the company is adding new customers. The Company completed the 100% share acquisition of the Turkey based spring water company in March 2012. Plans are underway to revamp the brand, expand regional distribution in Turkey and launch the ‘natural spring’ drinking water in the UAE and wider GCC. Furthermore, the poultry feed production capacity expansion is on schedule for completion in Q4, 2012, while the frozen baked product launch is planned for Q2, 2013.

Commenting on the results, His Excellency Rashed Mubarak Al Hajeri, Chairman of Agthia Group said, "We are pleased with Agthia's overall performance across all divisions in the first quarter of 2012. The volatility in the commodity market and the regional unrest pose as challenges, however the Company is progressing in line with its long term strategy. We remain optimistic and expect another year of good performance in 2012.” 

Ilias Assimakopoulos, Chief Executive Officer of Agthia, added, “We continue to focus on growth opportunities by consolidating the newly introduced products, driving the core business, expanding geographically, while addressing the challenge of higher input costs by pursuing cost savings initiatives. We look forward to the opportunities that will arise with the newly acquired spring water company. We expect 2012 to be another stepping stone year leading us to Agthia’s ambition of becoming the UAE’s leading food and beverage group.”

Sales

In the first three months of 2012, net sales grew strongly by 12% year on year reaching AED 311 million. This performance is attributable to 17% sales growth delivered by the Consumer Business Division and 10% growth achieved by the Agri Business Division.

Net Profit

Net profit for the first three months of 2012 grew ahead of the sales growth at 21% year on year to AED 27 million. This strong growth was driven by improved gross profit margin of the Agri Business Division resulting from cost saving initiatives, production capacity increases of flour and feed mills displacing outsourcing, competitive procurement of grains and price increases.

Divisional Performance

Agri Business Division (ABD)

ABD net sales grew 10% year on year reaching AED 213 million, driven by 9% volume growth. Net profits grew strongly at 30% to AED 33 million primarily due to 400 basis points improvement in gross profit margin. The margin improvement resulted from cost savings initiatives, in house production of previously outsourced volume of flour & feed and competitive procurement of grains. 

Consumer Business Division (ABD)

CBD net sales grew 17% year on year reaching AED 98 million, while net profit reduced by 11% to AED 7 million, mainly due to losses of fresh dairy and Egyptian businesses.

The Water & Beverages segment net sales grew by 14% year on year to AED 81 million, while net profit grew by 14%, in line with the sales growth.  

The Food segment net sales grew by 36% year on year to AED 17 million. Net loss of  AED 3.9 million is attributed to the fresh dairy product and Egypt operation. 

Fiscal 2012 Outlook

The volatility of the commodity market and regional unrest are certainly challenging, yet we are progressing on our long term strategy. We remain optimistic and expect another year of good business performance in 2012.