Abu Dhabi-based food and beverages company Agthia Group said its nine-month net profit surged, boosted by acquisitions, cost optimisation measures and due to a one-off charge it booked last year.
Net income for the nine months to the end of September increased to Dh103 million ($28m), compared with about Dh10m in the same period last year, the company said in a statement on Tuesday to the Abu Dhabi Securities Exchange, where its shares are traded. Net revenue surged 34 per cent to Dh2.1 billion.
“Our growth has been skilfully supported by an institutionalised modular approach to integration of new units to our business,” said Khalifa Al Suwaidi, chairman of Agthia Group.
“We expect to see continued robust activity over the remaining months of the year, providing further opportunity for us to demonstrate the durability of our results and increased market leadership.”
The company swung to a net profit of Dh35m during the third quarter of this year, from a loss of Dh32m last year, owing to a Dh59m one-off charge it faced after an assessment of its books. Revenue rose 62 per cent to Dh795m during the period.
Agthia — which is part of one of the region’s largest holding companies, ADQ — manufactures, distributes and markets a range of food and beverage products, including popular regional brands such as Al Ain Water and Al Foah dates.
In April, the company announced a five-year strategy to become the biggest food and beverage company in the region by 2025. It has been on an acquisition spree in recent quarters, adding Kuwait’s Al Faysal Bakery and Sweets, Jorda’s Nabil Foods and the world’s largest date processing and packaging company, Al Foah, to its consumer business division.
“Our portfolio transformation and integration are fully on track and have helped us unlock cost synergies and productivity with Al Foah,” said Alan Smith, chief executive of Agthia Group.
Agthia’s acquisitions this year have boosted the net revenue contribution of the company’s consumer business by almost 50 per cent annually to Dh1.4bn during the first nine months of 2021. It now accounts for 67 per cent of total revenue. The protein division contributed Dh373m to net revenue over the same period.
The company’s water and beverage category recorded slightly lower sales in the nine months to September 30, compared with the same period in the previous year, following the discontinuation of the beverages business in January this year.
Meanwhile, higher sales were recorded in the UAE bottled water category in both the second and third quarters of 2021 on the back of higher volumes in the food service channel after hotels and restaurants opened following the relaxation of movement curbs amid the pandemic, Agthia said.
Its bottled water portfolio — Al Ain Water, Al Bayan, Voss and Alpin — retained market shares of 26 per cent and 23 per cent, respectively, in the UAE market, it said.
On the snacking front, the business units recorded net revenue of Dh334m, it said.
Agthia’s agribusiness revenue decreased by 4 per cent over the nine-month period, compared with the previous year, largely driven by a one-time World Food Programme order and lower wheat trading.
The company’s total assets at the end of September climbed to Dh5.5bn, a 76 per cent rise on annual basis, after it consolidated Al Foah, Al Faysal Bakery and Nabil Foods during the first half of the year.
Shareholders approved Agthia board’s recommendation of 8.25 fils per share, equivalent to Dh65.3m for the first half of 2021.