Cost rises hit yield at Agthia

The Abu Dhabi-based food and beverage producer reported a dip in profit as the rollback of subsidies increased costs.

Agthia's gross profit from the water segment was up almost 42 per cent to Dh111m during the first quarter. Delores Johnson / The National

Agthia Group, the Abu Dhabi-based food and beverage producer, reported a drop in profit as the rollback of subsidies increased costs.

Profit attributable to equity holders of the group fell by more than a fifth to Dh52.4 million for the first quarter from Dh67.5m a year earlier as higher utility tariffs and a slower animal feed business put earnings under pressure.

Revenue was Dh521m, up by 7.4 per cent from a year ago.

Its agri-business division, which distributes flour and animal feed, reported gross profit of Dh61m, down almost 35 per cent from a year ago.

Last year, Abu Dhabi changed its subsidy programme for flour and animal feed businesses.

To shore up its animal feed business, Agthia launched its first premium forage product under the Agrivita Marabe brand and entered a joint venture with Anderson Hay and Grain Company, the US hay exporter, in April.

“While we anticipate headwinds to prevail throughout the year, the strength of brands within Agthia’s portfolio of consumer goods will continue to drive growth,” said Dhafer Al Ahbabi, the chairman of Agthia.

The revenue growth was led by the group’s water business.

It acquired Jeddah-based Delta Water during the first three months of this year. The group owns bottled water brands such as Al Ain and Al Bayan. The gross profit from the water segment was up 42 per cent to Dh111m during the first quarter, compared with Dh78m during the same period last year.

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