Agthia reports 2% rise in full-year revenue on product diversification and expansion

Revenue climbs to Dh2.04 billion while profits slid 35% to Dh137 million

Agthia reported a drop in its first-half net profit on Tuesday.​​ Delores Johnson / The National

Agthia, the Abu Dhabi food and beverage company that produces Al Ain water, reported a 2 per cent increase in its full-year revenue for 2019 due to the company's ongoing geographic expansion and diversification of products.

Revenue for the period ending December 31 climbed to Dh2.04 billion, the company said in a filing to Abu Dhabi Securities Exchange, where its shares trade. However, net profit attributable to shareholders, slid 35 per cent to Dh137 million and net operating income fell 36 per cent to Dh133.2m.

"Our positive revenue growth momentum has been led by diversification of our product portfolio, as well as increasing our geographical footprint in the face of unfavorable external factors," said Tariq Al Wahedi, Agthia Group chief executive.

“Agthia continues to demonstrate dominance in the UAE when it comes to the water segment despite aggressive competitive activity, price promotions and changing consumer habits, which has added pressure to the bottled water category, yet came in favour of the growth in shipped volumes of our 5-gallon HOD [home and delivery] business.”

Agthia also said the consumer-business contribution to the company’s top-line increased to 56 per cent from 54 per cent in 2018.

The company's 5-gallon HOD in the UAE and its food segment, along with international operations in Saudi Arabia and Kuwait, drove the consumer business's top-line growth. The company's water portfolio consisting of the popular Al Ain Water, as well as Al Bayan and Alpin, retained market leadership with volume and value shares at 29 and 27 per cent, respectively.

“Our commitment to cost optimisation across the entire organisation, better agri-business profitability and one-time Turkey tax credit has reduced the collated impact of the withdrawal of the remaining bakery channel subsidy, de-growth in bottled water category in UAE and bad debt provisioning against longer collection days in international markets,” Mr Al Wahedi said.

The company's total assets increased marginally to Dh3.1bn as of December 31, compared to the same time in 2018 on the implementation of new accounting standards.

Aghtia’s flour business outperformed despite pulled out subsidy environment, as volumes recorded strong growth in export sales, retail penetration specifically in the Northern Emirates and wheat trading. However, animal feed sales fell short due to lower grain sales and a decrease in demand from small-sized farms.