Agthia Group is a subsidiary of Abu Dhabi Developmental Holding Company (ADQ), one of the region's largest corporations with a diverse portfolio of enterprises operating in key sectors of Abu Dhabi. Agthia has a market cap of Dh3.89 billion on Abu Dhabi Securities Exchange (ADX).
For the first time since its founding, the company's quarterly net revenues reached Dh1 billion in Q1-2022, growing by 58 per cent year-on-year. The net profit was Dh216 million, up from Dh34 million the previous year, when there was a one-time expenditure of Dh83 million due to a strategic review of the balance-sheet. The significant increase in net income was driven by the inclusion of Al Foah, Al Faysal Bakery, Nabil Foods and Atyab, as well as important cost-cutting initiatives and pricing that offset the impact of rising raw material costs and M&A-related expenses.
Resourceful on sourcing
The milestones achieved reflect the group’s dedication to renovation efforts across all its primary verticals as its builds a more effective business that will enhance value creation and increase efficiency. As commodity prices are rising due to supply chain constraints and geopolitical uncertainties, F&B company stocks remain in the limelight. India has been a primary source of the Abu Dhabi-based food company’s wheat supplies over the last 18 to 20 months and the group is currently working with the UAE government to source wheat from India under exemption caveats, as India has imposed a ban on the export of the commodity.
Astute Saudi move
The group approved a Dh90 million greenfield investment in Jeddah for the construction of a manufacturing plant for Nabil Foods, one of Agthia's protein brands. The project will strengthen Agthia's position in Saudi Arabia - the Gulf's largest and fastest-growing consumer market – and support the company's aim of becoming a MENA packaged goods industry leader. This collaboration will enable Agthia to accelerate the growth of its protein vertical. The greenfield investment will enable significant progress toward the group’s long-term profitability target and its commitment to deliver on a growth strategy to become a regional leader by 2025.
Expanding footprint in the region through investments and acquisition is a wise move in a dire global environment. It will allow an entry into new markets but also keep it growing in a stable manner. Additionally, Agthia will manage to stay ahead of the competition due to cost optimization measures and maintain pricing power.
The company has a 12-month dividend yield of 3.35 per cent.