Across-the-board gains drive Agthia to record quarterly profit

Group’s net income rose by 14 per cent to Dh486 million.

Agthia’s Al Ain dairy produces the Yoplait brand. Dairy was its biggest gainer in the food segment. Delores Johnson / The National

Agthia, the food and beverage company, reported record quarterly net profit driven by growth across most of its businesses.

Net income for the three-month period to March 31 rose by 14 per cent, year-on-year, to Dh68 million and group revenue increased by 14 per cent to Dh486m.

The shares rose by 1 per cent to Dh7.49.

Agthia’s profit was in line with that of EFG-Hermes. The Egyptian investment bank, which has a buy rating on Agthia, expects sustained earnings growth this year, as the company ramps up existing capacities and accommodates further capacity increases in the high-margin water and beverages division.

The Abu Dhabi-listed group experienced growth across its flour, water and dairy businesses but found a challenging market in its animal-feed business where revenue of Dh162m was 6 per cent lower than in the same period last year. Agthia put the fall down to increased competition and decreasing commodity prices.

The Al Ain water bottler, which bought the Al Bayan water business last year, had a strong start to the year across its consumer business with revenue jumping by 28 per cent year-on-year to Dh204m.

The water and beverages segment had a 25 per cent jump in revenues with organic growth, excluding Al Bayan, at 11 per cent. The company opened a second high-speed bottling plant at the end of March, increasing capacity by 40 per cent.

This month, Agthia said it would open a plant to produce Al Ain water in Kuwait, taking advantage of the country’s high per capita water consumption.

The plant is expected to be ready by the second half of next year and will have capacity of 30,000 bottles an hour.

Dairy, supported by the launch of its Yoplait Fruit Burst, was its biggest gainer in the food segment with a 46 per cent jump in revenues compared with last year. But the company said net losses in the segment increased in the first quarter, which it put down to a “front-loaded marketing investment that will subside during the rest of the year”.

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