UAE food group Agthia’s profit for the first six months fell by 49.72% to 42.26 million dirhams ($11.51 million) compared to 84.06 million dirhams for the same period in 2019.
The company behind Al Ain dairy and Al Bayan water posted a 2.58% higher revenue of 1.09 billion dirhams, according to its bourse filing on Tuesday (July 28).
However, cost of sales rose by 4.07% to 756.11 million dirhams from 726.54 million dirhams year-on-year, and general and administrative expenses increased by 31.86% to 103.37 million dirhams.
The Abu Dhabi-based company competes in consumer business selling water, beverages, dairy, tomato paste, frozen vegetables, bakery and trading items, as well as in agri-business that covers flour and animal feed.
Its consumer business comprises 54% of revenues while agri-business generated the remaining 46%.
Agthia’s consumer line earned 584 million dirhams in revenue, a 2% dip year-on-year. Its 5-gallon home and office distribution grew by 8% on higher demand particularly from homes, it said.
But its bottled water sales dropped in volume on lower consumption from the tourism sector due to the lockdowns and COVID-19 restrictions on the food service channel.
Its water portfolio, consisting of Al Ain, Al Bayan and Alpin, held a leading retail market position with 29.1% of volume and 26.1% in value, said Agthia citing AC Nielsen May 2020 data.
Outside the UAE, Agthia said its Kuwaiti operations continued to “perform well” but sales in Saudi Arabia were largely hit by the COVID-19 lockdowns and restrictions, which included the suspension of all umrah travel and tourism since the end of February.
Its food segment’s net revenue posted a growth of 27% driven by a boost in demand for trading items, tomato paste and frozen vegetables in the UAE and Egypt due to the COVID-19, said the company.
Agthia’s agri-business line earned 506 million dirhams in revenue for the first-half of the year, a 9% growth compared to the same period in 2019.
Revenues for flour were up by 29% to 265 million dirhams on higher domestic volume, export sales and wheat trading, said the company.
However animal feed was down 7% on lower grain sales and local demand amid new controls that restricted commercial farms from trading subsidized animal feed in the open market.
Agthia is 51% owned by the government of Abu Dhabi’s industrial investment holding company Senaat. Outside the UAE, it has subsidiary operations in Egypt, Turkey, Oman, Saudi Arabia and Kuwait.
The F&B group welcomed new CEO, Alan Smith, in early July. Smith was formerly Managing Director for Middle East and Pakistan for Mondelez International, the company behind global brands including Cadbury, Oreo and Ritz.
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