Sales grew to AED 911 million
Profit rose to AED 125 million
Robust double-digit growth in sales (11%) and net profit (20%)
ABU DHABI, July 30, 2015: Agthia Group PJSC, one of the UAE's leading food and beverage companies, reported that net profit for the first half of 2015 increased 20 percent from the same period in 2014 to AED 125 million, driven by higher sales and improved margins. Net sales for the period grew 11 percent to AED 911 million.
H.E. Eng Dhafer Ayed Al Ahbabi, Chairman of Agthia Group commented: "Our second quarter performance builds on the strong start we had in the first three months of 2015, delivering a promising first half of the year in line with our full-year outlook. These results underline our commitment and ability to deliver sustainable, profitable growth for our shareholders by becoming market leaders in our chosen categories and pursuing aggressive distribution and product portfolio expansion."
Iqbal Hamzah, Chief Executive Officer of Agthia, added: "Agthia's core businesses continue to grow year-on-year, with the water and beverages segment leading the way. Robust double-digit growth in profit and sales is a reflection of the successful implementation of our strategy, underpinning the trust that our customers and consumers have in our products and keeping us on track to achieve our ambitious targets."
Agri Business
The Agri Business, which manufactures and distributes Grand Mills flour and Agrivita animal feed products, saw net sales reach AED 560 million for the first half of 2015, delivering a 5 percent increase from the same period last year. Net profit surged 12 percent year-on-year to AED 127 million, driven by an improvement in gross margins for feed resulting from competitive grain sourcing and favorable volume mix, and distribution gains for flour.
Sales at Grand Mills flour grew 9 percent in the period (15% including wheat trading), as the company secured new customers in the Northern Emirates, made distribution gains in both modern and lower retail trade outlets, achieved higher exports sales, and improved penetration of recently launched Arabic bread flour in the Northern Emirates, which together contributed to a 13 percent increase in net profit. Favorable commodity prices supported growth of Agrivita, as well as an improvement in gross margins, leading to net profit gains of 11 percent. Production capacity upgrades for poultry and large animal feed lines were completed.
Consumer Business
The Consumer Business, which produces and distributes consumer brands including Al Ain Bottled Water, Alpin Natural Spring Water, Yoplait fresh dairy products and Capri Sun juices, recorded net sales of AED 351 million for the period, a 21 percent growth year-on-year. Net profit jumped 60 percent to AED 35 million, driven by a strong performance in the unit's water and beverage segment.
Distribution gains of Al Ain bottled water, following the installation of the high-speed bottling line last year that expanded capacity by 60 percent, combined with increased margins resulting from lower PET usage and cost and production efficiency, helped drive sales and profits in the division. Market leadership in the UAE was maintained, at 25 percent volume share, according to AC Nielsen data at the end of May. A second high speed bottling line will be ready by mid-2016, increasing capacity by a further 40 percent, and new distribution centers are under construction in Abu Dhabi and Dubai, in order to meet current and expected demand.
Sales of Al Ain 5 gallon bulk water rose 30 percent, driven by distribution growth in the Municipality channel and further penetration into Dubai and Northern Emirates, supported by the introductory launch of a new online ordering system, Irtawi, in Al Ain and Abu Dhabi. Alpin natural spring water, Agthia's Turkish brand, saw sales in the UAE triple as distribution expanded across all retail channels. In Turkey, Alpin continued to gain distribution with a key focus on the core Ankara market, with sales in local currency growing by 17 percent year-on-year. Capacity expansion of Alpin is on track for completion in quarter three, while construction of a new warehouse facility has commenced.
Capri Sun business performance continued to show good recovery with sales of AED 37 million, up 10 percent versus last year. The turnaround has been achieved via the introduction of new flavors, continued brand marketing support through consumer promotions, and active digital and social media. A price increase in retail trade was successfully implemented in April.
The food segment achieved net sales of AED 54 million during the first half of the year. The dairy business gross margin improved significantly, as the Group rationalized plain yoghurt and launched the premium and margin-enhancing "Yoplait DELIGHT" indulgent dessert. The frozen vegetable range saw sales rise 9 percent from the same period a year ago as price increases across the retail and private label portfolio were implemented. Meanwhile, the Frozen Baked category saw continued production development and customer acquisition is in progress. Following an agreement signed at the beginning of the year with UK-based Monty's Bakehouse, we have secured our first contract to manufacture Monty's products for a leading airline with shipments expected to commence in the third quarter.
The Egyptian business grew by 2 percent for the period. B2C sales in Egypt will recommence in Q3 2015 following the appointment of a network of sub-distributors in Cairo and the Delta Region.
-Ends-
About Agthia
Agthia Group is a leading Abu Dhabi based food and beverage company established in 2004.
The Company is listed on the Abu Dhabi Securities Exchange (ADX) and has the symbol "Agthia". 51 percent of the Company's shares are held by Senaat (General Holding Corporation), an Abu Dhabi Government entity, with the balance held by individual and institutional investors.
The Company's assets are located in the UAE, Egypt and Turkey. Agthia offers a world class portfolio of integrated businesses providing high quality and trusted food and beverage products for customers and consumers across the UAE, GCC, Turkey and the wider Middle East.
Agthia employs over 2,200 employees and has two business divisions in various food and beverage segments:
Agri Business: UAE - manufacturing, distribution and marketing of Grand Mills, the leading high quality flour and Agrivita leading animal feed products;
Consumer Business: UAE - manufacturing, distribution and marketing of several brands including Al Ain Water, the leader in bottled drinking water; Capri-Sun juices; Yoplait fresh dairy products. Egypt - Al Ain Pure Natural tomato and chilli paste, and fruit puree. Turkey - Alpin, natural spring bottled water.
For more information, please visit www.agthia.com or contact:
Ozgur Serin
Agthia Group
Tel: 971 2 506 0600
Email: ir@agthia.com
Sheena Shah
Brunswick Group
Tel: 971 2 234 4606
Email: AGTHIA@brunswickgroup.com
© Press Release 2015
