Drinks put the fizz into Agthia

Profits poured in to Abu Dhabi's Agthia Group during the first quarter on the back of rising sales.

Agthia, which owns the Al Ain mineral water brand, reported a 41 per cent rise in net profit in its water and beverages segment. Sammy Dallal / The National

Agthia Group earned fat profits from drink sales in the first quarter as the Abu Dhabi food producer increased regional operations.

The company, which owns the Al Ain mineral water brand, registered a 38 per cent increase in net profits in the first three months of the year to Dh37 million, while sales rose 16 per cent to Dh361m.

The consumer business division, which covers water, beverages and food, registered 29 per cent growth in net sales to reach Dh127m. The division's net profit stood at Dh9.4m, representing a 36 per cent increase year on year.

Net profit in the water and beverages segment rose 41 per cent as a result of higher volumes and lower costs. However, the food segment registered a net loss of Dh 5.9m.

Sales in the agri-business division were up 10 per cent in the same period, reaching Dh234m, while net profits grew 31 per cent to Dh44m.

"We are very pleased with our performance during Q1 2013 across all categories," said Rashed Mubarak Al Hajeri, the chairman of Agthia.

"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."

Agthia is not the only Middle East food producer to have reported rising profits that coincide with higher income levels in the region.

Saudi Arabia's Savola Group, a manufacturer of sugars and edible oils, reported a 16.7 per cent growth in net profits last year to 1.4 billion Saudi riyals (Dh1.37bn) as sales grew 8.7 per cent.

Almarai, also based in the kingdom and the Arabian Gulf region's largest dairy producer with a 44 per cent share of the Gulf's dairy market, said net profit had surged 29 per cent in the fourth quarter to 369m riyals.

In the UAE, Agthia holds the distribution rights to a number of brands including Chiquita, Capri-Sun and Yoplait.

Last year it added to its portfolio internationally with the acquisition of Pelit Su, a Turkish spring water company that Agthia rebranded as Alpin. The company plans to commission a five and 10-litre bottling line and launch the brand in the Emirates in the second half of the year.

Other plans this year include the expansion of poultry feed production and the launch of frozen baked products.

"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," said Ilias Assimakopoulos, the chief executive of Agthia.

"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."

Next year the company aims to increase its flour milling capacity and commission a new high-speed bottling line.

The company said conditions remained challenging, but it was progressing with its sustainable growth strategy, improving the performance of its new products and Egyptian operation, expanding geographically and improving operating and cost efficiencies.

"We remain optimistic and expect another successful growth year," the company said.