Text size:

  • Small
  • Normal
  • Large
Agthia's consumer business includes the manufacture and distribution of Al Ain bottled water. Sammy Dallal / The National
Agthia's consumer business includes the manufacture and distribution of Al Ain bottled water. Sammy Dallal / The National

Food producer Agthia posts appetising results

Profits at Agthia surged almost 60 per cent in the second quarter on the falling cost of sales after the Abu Dhabi Government increased subsidies to the food producer.

Profits at Agthia surged almost 60 per cent in the second quarter on the falling cost of sales after the Abu Dhabi Government increased subsidies to the food producer.

Net income rose to Dh28.8 million (US$7.84m) in the quarter from Dh18.1m in the same period a year earlier. Agthia's compensation from the emirate amounted to Dh144.24m.

"The purpose of the compensation was to partially reduce the impact of increased and volatile global grain prices on food retail prices for the consumers in the Abu Dhabi emirate," Agthia said in a regulatory filing to the Abu Dhabi bourse yesterday.

An increase in the price of grains triggered by droughts in the United States, the world's largest producer, has raised concerns at the United Nations' food agency.

"We are concerned for two reasons: first the pace at which price rises are taking place; and second because, at least for the time being, there seems to be no relief in prices, in particular for corn, soya beans and wheat," Abdolreza Abbassian, at the UN's Food and Agriculture Organisation, told Reuters.

Agthia is restricted in how much it can pass higher commodity costs on to consumers by a price-control policy in the UAE that keeps the cost of 400 food products capped and relatively low.

"In the near to medium term, if prices stay at the levels where they are today, it could have an impact on the profitability of Agthia," said Ashish Jain, an analyst at NBK Capital in Kuwait.

Agthia is an important player in Abu Dhabi's food security strategy and is 51 per cent owned by the Government through shares held by the conglomerate General Holding.

It is split into three divisions: consumer; agriculture; and an Egyptian business.

The consumer business includes the manufacture and distribution of Al Ain bottled water, frozen vegetable products, Isklar water, Chiquita juices and Yoplait dairy products.

Yoplait claims to be the second-largest brand in terms of sales in the fresh dairy product category worldwide and the biggest in the US and Australia.

To keep up with demand, Agthia recently increased the annual capacity at its flour plants from 205,000 tonnes to 282,000 tonnes and at its animal feed plant from 370,000 tonnes to 488,000 tonnes.

halsayegh@thenational.ae

twitter: Follow and share our breaking business news. Follow us

iPad users can read the digital edition of business section as it was printed via our e-reader app. Click here

Back to the top

More articles


Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 An air traffic control tower is seen at the central terminal of LaGuardia Airport on April 8, 2014. Shannon Stapleton / Reuters

In pictures: New York’s LaGuardia Airport in need of a rebuild

With constraints on its resources and no appetite for further debt, private investors and developers are being tapped to rebuild the 50-year-old central terminal for $3.6 billion, instead of using traditional public finance methods.

 The bridge of Seajacks Hydra, as the wind farm installation vessel undergoes finishing touches and testing works at Lamprell’s Hamriyah facility in Sharjah before its planned delivery on June 2, 2014. Jeffrey E Biteng / The National

In pictures: Building the Seajacks Hydra

The Seajacks Hydra, a wind farm installation vessel, is undergoing finishing touches and testing works at Lamprell’s Hamriyah facility in Sharjah before its planned delivery on June 2, 2014.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 An Uber taxi driver drives his car through a street in New Delhi, India. Saurabh Das / AP Photo

In pictures: On-demand cab service app Uber targets India

Taxi-hailing smartphone app Uber is making a big push into Asia with the company starting operations in 18 cities in Asia and the South Pacific including Seoul, Shanghai, Bangkok, Hong Kong and five Indian cities in the last year.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National