Agthia Group reports Q1 2013 financial results

Agthia Group P.J.S.C., one of UAE’s leading food and beverage groups (ADX: Agthia), released the Company’s financial results for the First Quarter of 2013. The Company achieved a robust performance as reflected by the strong sales and profit growth. Net sales during the first three months grew by 16% year on year to reach AED 361 million, while net profits reached AED 37 million, recording a solid 38% rise year on year.

Amongst the highlights of the report, Agthia’s Consumer Business Division achieved strong 29% net sales growth year on year, while the Agri Business Division net sales grew by 10% over the same period. The Group’s priorities on growing core businesses remained strongly focused on further expanding the distribution, maintaining strong volume growth momentum and driving consumer products’ export market growth.

A consumer validated study on Yoplait fresh dairy products has been completed and the re-launch of Yoplait portfolio with new look packaging and additional flavors are planned for April 2013.

In Turkey, newly branded Alpin spring water was launched successfully in February 2013 with all focus currently being on gaining distribution. Plans are on track for the commissioning of the five and ten liter new bottling line in 2013 and the launching of Alpin water in the UAE during second part of the year. Poultry feed production capacity expansion is also on track to commence production in April 2013, while flour milling capacity increase will be operational in Q1 2014 and the new high speed bottling line will be commissioned in Q2 2014. The new initiative of frozen baked product remains on track for launch in Q4 this year.

Commenting on the results, His Excellency Rashed Mubarak Al Hajeri, Chairman of Agthia Group said, “We are very pleased with our performance during Q1 2013 across all categories. Despite the challenging conditions facing the food and beverage markets, we are moving on our long-term strategy and are optimistic of good business performance and growth in 2013.”

Ilias Assimakopoulos, Chief Executive Officer of Agthia, added, “Our focus during the year will continue to be growing core businesses, consolidating and growing diversification initiatives while pursuing regional expansion and cost saving initiatives. Our performance for the first quarter has been very encouraging with strong volume, sales and profit growth, and we look forward to carrying this momentum through the year.” 

Sales

Net sales for the first three months at AED 361 million grew strongly at 16% year on year. This is attributable to 29% sales growth delivered by the Consumer Business Division and 10% growth achieved by the Agri Business Division. 

Net Profit

Net profit of AED 37 million for the first three months reflects a solid growth of 38% year on year. This strong performance was driven by higher volumes and improved gross profitmargin resulting from cost saving initiatives, lower input cost and higher flour prices in Northern Emirates. 

Agri Business Division (ABD)

ABD net sales grew 10% year on year reaching AED 234 million, driven by 9% volume growth. Net profits of AED 44 million grew strongly by 31% due primarily to the 300 basis points improvement in gross profit margin. The margin improvement resulted from ongoing cost savings initiatives, lower input cost and higher Northern Emirates flour prices. 

Consumer Business Division (CBD)

Consumer Business Division achieved strong 29% net sales growth year on year reaching AED 127 million.  CBD’s both segments – (Water & Beverages and Food) achieved net sales growth of 29% reaching AED 105 million and AED 22 million respectively.

Division’s net profit at AED 9.4 million grew by 36% year on year. Water & Beverages segment’s net profit grew by 41%, driven by 200 basis point gross profit margin improvement as a result higher volumes and lower  PET cost; while Food segment net loss AED 5.9 million is attributed to the fresh dairy product and Egypt operation. 

Future Outlook

The environment remains challenging, yet we are progressing with our sustainable growth strategy focusing on delivery of profitable core business performance, improving the performance of our recently launched products and Egyptian operation, expanding geographically, enhancing manufacturing capabilities and improving operating and cost efficiencies. We remain optimistic and expect another successful growth year.