An Al Ain water bottling plant. Al Ain is one of Agthia's main brands. Delores Johnson / The National
An Al Ain water bottling plant. Al Ain is one of Agthia's main brands. Delores Johnson / The National

Al Ain water maker Agthia posts 4% rise in fourth-quarter profit



Agthia, the food and beverage maker, warned of a tough year ahead as it reported a 4 per cent rise in fourth-quarter profit.

Profit rose to Dh54.3 million, compared with Dh52.3m a year earlier, while sales gained 9.2 per cent to Dh509m.

Net profit for last year touched Dh254.3m, compared to Dh231m in 2015, up 10 per cent, as net revenues grew 7.4 per cent year-on-year to Dh2.01 billion.

A slowdown in consumer consumption and a change in Abu Dhabi’s subsidy regime given to flour and animal feed businesses hit revenues during the second half of the year.

Water and electricity tariffs have risen by 23 per cent and 34 per cent respectively from January 1 in the emirate.

“While it is clear that the environment in 2017 will remain tough as we confront external cost challenges, our core business fundamentals are robust,” said Dhafer Ayed Al Ahbabi, the chairman of Agthia. “We will continue to focus on regional expansion and investment opportunities to grow sales [and] increase market share.”

Last year revenues from Agthia’s two other largest business segments, flour and animal feed, were flat.

To shore up its volume and profits, the Abu Dhabi-listed company introduced competitively priced products in flour and animal feed during the third quarter and expanded its distribution network in the Northern Emirates and export markets, according to Agthia.

“The results were better than expected,” said Sanyalaksna Manibhandu, the head of research at NBAD Securities. “Some food segments are more discretionary, such as yogurt and drinks, than others, such as grains and water, and some people might think they don’t need [the discretionary items] during tough times.”

Saudi companies such as Almarai were hit by a rise in utility tariffs in Saudi Arabia last year.

Agthia has been expanding its water business over the past two years. The segment, which includes the Al Ain and Al Bayan water brands, “continues to be a key driver of growth”, according to Tariq Al Wahedi, the acting chief executive of Agthia.

Agthia bought Dubai-based Al Bayan water company in 2015. Last year, it signed a joint venture with Kuwait’s Al Wafir Marketing Services Company to set up a water bottling plant in Kuwait to produce Al Ain Water. It also acquired the water business of Jeddah-based Delta Marketing Company, which produces the Al Ain brand water last year, but the company declined to reveal the value.

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KEY DATES IN AMAZON'S HISTORY

July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington

July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon

1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024

1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs

2000: Amazon Marketplace opens, allowing people to sell items on the website

2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006

2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black

2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year

2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video

2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started

2009: Amazon introduces Amazon Basics, its in-house label for a variety of products

2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013

2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS

2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa

2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition

2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

The biog

Age: 23

Occupation: Founder of the Studio, formerly an analyst at Cleveland Clinic Abu Dhabi

Education: Bachelor of science in industrial engineering

Favourite hobby: playing the piano

Favourite quote: "There is a key to every door and a dawn to every dark night"

Family: Married and with a daughter

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John Heminway, Knopff

UAE currency: the story behind the money in your pockets
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Forwards: Yuya Osako, Takuma Asano, Koya Kitagawa

Company Profile

Company name: Hoopla
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Founder: Jacqueline Perrottet
Based: Dubai
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Investment required: $500,000

The bio

Favourite book: The Alchemist by Paulo Coelho

Favourite travel destination: Maldives and south of France

Favourite pastime: Family and friends, meditation, discovering new cuisines

Favourite Movie: Joker (2019). I didn’t like it while I was watching it but then afterwards I loved it. I loved the psychology behind it.

Favourite Author: My father for sure

Favourite Artist: Damien Hurst

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Story of 2017-18 so far and schedule to come

Roll of Honour

Who has won what so far in the West Asia rugby season?

 

Western Clubs Champions League

Winners: Abu Dhabi Harlequins

Runners up: Bahrain

 

Dubai Rugby Sevens

Winners: Dubai Exiles

Runners up: Jebel Ali Dragons

 

West Asia Premiership

Winners: Jebel Ali Dragons

Runners up: Abu Dhabi Harlequins

 

UAE Premiership Cup

Winners: Abu Dhabi Harlequins

Runners up: Dubai Exiles

 

Fixtures

Friday

West Asia Cup final

5pm, Bahrain (6pm UAE time), Bahrain v Dubai Exiles

 

West Asia Trophy final

3pm, The Sevens, Dubai Hurricanes v Dubai Sports City Eagles

 

Friday, April 13

UAE Premiership final

5pm, Al Ain, Dubai Exiles v Abu Dhabi Harlequins

Recycle Reuse Repurpose

New central waste facility on site at expo Dubai South area to  handle estimated 173 tonne of waste generated daily by millions of visitors

Recyclables such as plastic, paper, glass will be collected from bins on the expo site and taken to the new expo Central Waste Facility on site

Organic waste will be processed at the new onsite Central Waste Facility, treated and converted into compost to be re-used to green the expo area

Of 173 tonnes of waste daily, an estimated 39 per cent will be recyclables, 48 per cent  organic waste  and 13 per cent  general waste.

About 147 tonnes will be recycled and converted to new products at another existing facility in Ras Al Khor

Recycling at Ras Al Khor unit:

Plastic items to be converted to plastic bags and recycled

Paper pulp moulded products such as cup carriers, egg trays, seed pots, and food packaging trays

Glass waste into bowls, lights, candle holders, serving trays and coasters

Aim is for 85 per cent of waste from the site to be diverted from landfill