News Column

Agthia Group reports Dh104.5m first-half profit

July 24, 2014

Alexander Cornwell Staff Reporter

Dubai: Agthia Group, Abu Dhabi-based food and beverage group, on Thursday reported a net profit of Dh104.5 million for the first six months of the year, a 21 per cent increase over the same period last year.

Iqbal Hamzah, the company's acting chief executive and chief financial officer, told Gulf News by phone that results were driven by growth in the UAE and improving performances out of Egypt and Turkey.

Company net sales increased by 8 per cent in the first half of the year, reaching Dh822.6 million.

The Agri Business Division, which manufactures and distributes Grand Mills flour and Agrivita animal feed, recorded net sales of Dh523.4 million, up 8 per cent. The division's net profit was Dh113.4 million, up 21 per cent.

Hamzah said an expansion in the production of animal feed is expected to be complete by the end of the year. He also said the company invested Dh150 million across the portfolio in the first half of the year.

The Consumer Business Division, which produces and distributes products including Al Ain mineral water, Yoplait dairy products and Capri-Sun juices, saw net sales rise 7 per cent to Dh290.2 million. Net sales in the Water and Beverage segment reached Dh233 million, up 5 per cent compared to the first half of 2013. Water and Beverage net profit was Dh36.4 million, up 7 per cent.

Rising costs

While the Food segment's net sales reached Dh57.2 million, up 15 per cent, it recorded a loss of Dh14.2 million due to rising costs. Hamzah said the Food segment will deliver an overhaul loss this year, however, he expects second half losses to be less than it has been in the first six months of the year.

He also said that he expected the loss-making Egyptian operations to break even in 2014.

Hamzah, bullish on the rest of the year, expects overall year-on-year sales growth to be in the low double digits with profit growing faster than sales.

Agthia debt as of June 30, 2014, was Dh480 million, however, it has Dh600 million in cash surplus.

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Source: Gulf News (United Arab Emirates)

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