Agthia’s net profit surges 74% on strong H1’22 Results

Agthia’s net profit surges 74% on strong H1’22 Results
  • Group net revenues hit AED 2 billion, up 51% year-on-year
  • Net profit grew by 74% year-on-year to reach AED 118 million
  • Consolidation of acquisitions and cost optimization initiatives accelerated growth

Abu Dhabi, UAE, 04 August 2022 – Agthia Group PJSC, one of the region’s leading food and beverage companies, announced today that its H1 2022 net revenues grew to AED 2 billion, building on exceptional first quarter growth and ongoing consolidation of strategic acquisitions. The period ending 30th June 2022 saw a 51% year-on-year growth in net revenues compared with the same period in 2021.

Group net profit attributable to shareholders grew to AED 118 million for the period, a 74% increase relative to H1 2021, despite the challenging global inflationary environment. This performance reflects the impact of the Group’s recent acquisitions as well as its cost optimization efforts as part of its five-year growth strategy.

Khalifa Sultan Al Suwaidi, Chairman of Agthia Group, said: “Agthia’s first half results demonstrate the increasing benefits of our growth strategy to strengthen our F&B leadership in the Middle East and beyond. The acquisitions we have completed over the past year have not only delivered strong top-line growth but also contributed to enhanced profitability as we integrate the businesses into the Group and leverage synergies effectively. Having set out a number of promises and strategic priorities at the beginning of our transformational journey, we have already made significant progress across key milestone targets in a short space of time. Our confidence in Agthia’s capability to continue delivering tangible value for shareholders and stakeholders remains steadfast.”

Alan Smith, Chief Executive Officer of Agthia Group, said: “We have made significant progress in H1 2022. In the first quarter, our focus was on the consolidation of acquired entities, and in the second quarter we turned our attention towards accelerating synergy extraction and Group integration, which helped us offset higher direct costs and M&A related expenses, while minimizing the impact of supply chain disruption and tackling market volatility and inflation, all without compromising on the quality of our products.

Smith added: “Recent milestones, including Board approvals for expansion of our protein business in the Kingdom of Saudi Arabia and the acquisition of Egypt-based Auf Group will further support the realization of our five-year strategy as we capitalize on our strengthening momentum in-market. Once again, our team has done a great job despite ongoing market challenges, and I am confident that we have the right foundations in place to maintain our momentum in the second half of the year.”

From a financial perspective,

  • Agthia’s Consumer Business Division continued to display substantial growth of 71% compared with the previous year, now accounting for 73% of total group sales at AED 1.5 billion.
    • The Protein & Frozen segment contributed AED 570 million, of which AED 493 million was collectively added to the top line through the strategic acquisition of protein businesses in Jordan and Egypt last year. Both businesses recorded double-digit sales growth year-on-year driven predominantly by higher volumes and selling prices.
    • Snacking added AED 417 million to the top-line, being the first period to include BMB Group sales which contributed AED 149 million. Ongoing efforts to stimulate cost optimization and synergies across acquired entities more than offset higher raw and packaging material costs.
    • Water & Beverage, and Other Food items, recorded revenues of AED 475 million. Market leadership in Agthia’s bottled water portfolio was maintained at 28.5% and 28.2% for volume and value shares respectively in the retail channel despite increasing market competition.
  • Revenue in the Agri-business division for the quarter stood at AED 534 million, a 15% gain relative to 2021. Grain price inflation and increasing freight costs impacted overall profitability for the segment, however these were offset by pricing adjustments and catch-up compensation in the flour subsidized channel.

The Group’s total assets stood at AED 6.3 billion as of 30th June 2022, while total shareholders’ equity for the period stood at AED 2.8 billion.

In line with Agthia’s semi-annual dividend distribution policy, the Board of Directors is recommending a cash dividend equivalent to 8.25 fils per share for the first half of 2022, subject to shareholder and regulatory approvals.

Agthia recently announced an AED 90 million investment in a manufacturing facility in Saudi Arabia to drive growth for its protein vertical and in response to strong demand from local customers. Also, in July 2022, the Board approved the acquisition of a strategic 60% stake in Auf Group, a specialized healthy snacks and coffee manufacturer and retailer in Egypt.