Abu Dhabi-based food and beverage company Agthia Group reported 6.8 per cent jump in its second-quarter profit, despite currency headwinds in Egypt, one of the company's biggest markets.
The group's profit attributable to the owners of the company surged to Dh38.4 million ($10.5 million) in the April-June period, the company said in a regulatory filing on Wednesday to the Abu Dhabi Securities Exchange, where its shares are traded.
The profit was driven by strong growth in its snacking and water business and group-wide efficiencies.
The company’s revenue in the past quarter increased more than 8.1 per cent on an annual basis to more than Dh1.01 billion.
The revenue growth reflected a “strong volume and value performance from dates, underpinned by premiumisation and innovation, and good growth in flour, our food portfolio and international water, which cushioned the adverse impact of currency devaluation in Egypt”, Agthia said.
The company’s net profit in the first half of the year surged to Dh125.2 million while revenue stood at over Dh2.2 billion.
The Egyptian pound has been devalued three times since early 2022.
In June, Egyptian President Abdel Fattah El Sisi ruled out another devaluation of the country’s embattled currency in the near future, saying it would place an unbearable burden on the nation’s 105 million people.
Egypt – the Arab world’s most populous nation – is a strategically important market for Agthia from the point of view of a cost-effective manufacturing hub for key export markets across Gulf Co-operation Council countries and North Africa.
The company’s cash and equivalents stood at Dh600 million, post Dh579 million of debt prepaid in the year to date.
“Agthia’s results for the first six months of the year further demonstrate the management’s ability to successfully consolidate value-accretive businesses and leverage synergies while maintaining a profitable core, across all economic cycles,” said Khalifa Sultan Al Suwaidi, chairman of Agthia.
“Agthia will continue to create value for all stakeholders as it progresses its strategy to become a leading food and beverage company in the Mena region and beyond.”
Last month, Agthia launched a $54 million corporate venture capital fund that aims to expand its innovation capabilities and create mutual value with the start-up community.
Called Agthia Ventures, the new fund is co-funded by Agthia and its parent company ADQ, the Abu Dhabi-based investment and holding company, and will be co-managed with Touchdown Ventures.
“The efficiencies we continue to generate across our portfolio are enabling us to accelerate investment in capacity, sustainability, and digital excellence, while maintaining a robust balance sheet,” said Alan Smith, chief executive of the company.
“An economic backdrop characterised by inflationary headwinds and currency volatility has required us to remain disciplined and agile in our execution.”