Water, Water, Everywhere...and Profits
07/31/2013 11:00 am EST
Profits at an Abu Dhabi food and beverage company were up more than 50% in the first half, on the back of higher sales and better margins, writes Gillian Duncan of The National.
The producer of the Al Ain water brand Agthia Group (AGTHIA), said sales reached Dh764 million, a rise of 19%, while net profit stood at Dh87m, up 56% from the same period a year earlier.
The group is currently expanding the production and distribution of existing products, while adding new ones, such as Monster Energy, the United States' best selling energy drink, which Agthia plans to introduce to the Emirates.
"Agthia is making good progress on its strategy, focusing on profitably growing core business and improving performance of our recently launched products as well as our Egyptian and Turkish operations," said the company chairman Rashed Mubarak Al Hajeri.
"The company remains focused and will push ahead with growth plans through new product introductions, capacity expansions, as well as expanding our footprint across the GCC markets."
Profit margins improved across the group due to a better sales mix, competitive procurement, cost saving initiatives and higher flour prices in the Northern Emirates, according to the company.
Sales at Agthia's agri-business division, which manufactures and distributes Grand Mills flour and animal feed, were up 16% to reach Dh493m.
The rise in sales was even better in the consumer business division, which produces and distributes Al Ain water, Yoplait yogurt and Capri-Sun drinks. Sales in the first six months hit Dh271m, an increase of 25% on the same period a year previously.
Agthia relaunched Yoplait products during the first half featuring new packaging, additional low-fat options with fruit and new flavors.
The company launched its Alpin spring water brand in Turkey in the period, and has plans to commission a new five- and 10-liter bottling line in September.
It aims to introduce Alpin in the UAE during the second half. A new initiative to produce frozen baked products will be launched next year.
Expansion is also taking place in the agri-business division, where the company is expanding its flour milling capacity.
"We will continue to grow in the UAE, expand geographically and enhance our manufacturing capabilities, while improving operating and cost efficiencies," said Ilias Assimakopoulos, the chief executive. "Despite a challenging regional environment, we remain optimistic and expect another successful growth year."