Abu Dhabi: Abu Dhabi-based food and beverage company Agthia Group on Wednesday announced its financial results for the first half of 2019 revealing an overall dip in net profits to Dh88 million, down 23 per cent compared to the first half of 2018, with the company attributing the decline in profits to market conditions and the removal of government subsidies for items such as flour.
The group’s overall revenues grew by 5.4 per cent over the same period to Dh1.06 billion, with the company reporting revenues of Dh597 million from its consumer business division with items such as Al Ain Water and Al Bayan, and Dh465 million from its agri-business division. The company’s total assets ending in June was also up to Dh3.1 billion.
“Our expansion strategy, coupled with our continually diversifying portfolio, have enabled the group to grow revenues in the first six months of the year. We have continued to lead the UAE market with our water portfolio driven by our signature water brand Al Ain and the 5-Gallon HOD business,” said Tariq Ahmad Al Wahedi, chief executive officer of Agthia Group.
“The decline in profits in the first of the year is mainly down to two factors — the first is the removal of subsidies for the flour bakery channel that we were getting from the government before, and the second major part has been the increase in grain prices which have also affected our profitability,” he added.
Al Wahedi said he was confident profits would go up and that the company was maintaining a positive outlook on the market.
“Our outlook is good because on one side we see recovery in terms of the consumer confidence index and we are starting to feel signs from that. On the other side we see the government also taking initiatives in terms of reducing the cost on manufacturers and residents of the country in terms of waiving certain fees and reducing electricity tariffs.
“So we remain bullish and believe that we will continue to grow our revenues as we have done in the first half of 2019,” he added.
Al Wahedi also highlighted the group’s performances in markets outside the UAE in countries such as Saudi Arabia where it reported a top line growth of 38 per cent.
“Our global assets and businesses also performed exceptionally well, led by Kuwait and Saudi Arabia, where we are steadily growing our market share.
“As a result of the UAE’s good reputation and our brand awareness, we were able to find good ground in those countries including Oman and Egypt, gaining market share with the brands that we have,” he added.