UAE food group Agthia’s first-quarter profit dropped by 33% to 26.64 million dirhams ($7.25 million) compared to 39.95 million dirhams for the same three months last year.
The company behind Al Ain dairy products and Al Bayan water actually earned a 12.47% increase in revenue to 570.9 million dirhams ($155.45 million) but cost of sales surged by 15% to 400.44 million dirhams, it reported in a filing with the Abu Dhabi Stock Exchange on Wednesday (May 6).
Expenses also increased. Selling and distribution rose by 10% to 96.98 million dirhams and general and administrative expenses reached 48.14 million dirhams, an increase of 26%.
Agthia 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.
The company said in a statement the coronavirus pandemic “has had no material effects on the Group reported condensed consolidated financial results for the period ended 31 March 2020.”
The group’s business operations currently remain largely unaffected as the food and beverage industry in general is exempted from the bans and constraints imposed by regulatory authorities, including exemption from curfew hours and cargo shipping.
Agthia’s consumer business contributed 52% to total revenue and 48% came from its agri-business segment.
Consumer business grew 6% in revenue year-on-year to reach 298 million dirhams ($81.14 million).
Agthia’s food segment surged by 21% driven by trading items and tomato paste and frozen vegetables in its home base of UAE as well as in Egypt as consumers responded to the COVID-19 outbreak, said the company.
The quarter saw a rise of 8% year-on-year for Agthia’s 5-gallon home and office distribution business but bottled water sales recorded “a marginal descent”, said the company.
The agri-business division earned a 21% increase year-on-year in revenues to 273 million dirhams ($74.34 million).
Flour was a winner, posting a 52% surge in revenue compared to the same quarter last year, driven by strong domestic demand, higher wheat trading, and an increase in export sales that included a one-off order from the World Food Program, said Agthia.
However, animal feed revenues dropped by 4% on lower grain sales and reduced demand from small-sized farms.
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.
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