Agthia's first-half net profit drops on higher expenses
Net income for the six months ending June 30 declined to Dh42.26 million
Agthia, the Abu Dhabi food and beverage company that owns the Al Ain Water brand, said its first-half profit fell by about half in the first six months of the year, due to higher expenses.
Net profit for the six months through to June declined to Dh42.26 million, the company said in a statement to the Abu Dhabi Securities Exchange where its shares trade.
Selling and distribution expenses increased by 3 per cent to Dh187.3m while general and administrative expenses were up 31 per cent to Dh103.3m.
Revenue also grew by 2.5 per cent to Dh1.09 billion, according to the company.
“In the first half of 2020, Agthia Group demonstrated resilience and agility in dealing with the uncertainty imposed by the Covid-19 pandemic and its influence on the operational environment across our markets,” Aghtia chairman Khalifa Al Suwaidi said.
“Enforcement of ... movement restrictions caused business disruptions, logistics transformation and changed consumer demand patterns. In response, we reprioritised our resource allocation across our flexible supply chain to ensure business continuity and products availability at appropriate cost,” he said.
Net revenue contribution by the consumer business line that includes water, beverages, dairy, tomato paste, frozen vegetables, bakery and trading items reached 54 per cent.
Agri-businesses – flour and animal feed – generated the remaining 46 per cent, the company said.
In the UAE, Agthia’s five-gallon home and office distribution business grew by 8 per cent year on year on higher demand, particularly from the home segment.
Second-quarter net profit fell by 64 per cent to Dh15.6m as revenue declined by 6.5 per cent to Dh518.7m.
Selling and distribution expenses also slipped during the period while as general and administrative expenses increased.
Agthia appointed Alan Smith as chief executive earlier this month.
Mr Smith was previously with US confectionery multinational Mondelez International, where he spent more than 19 years in various roles, and was most recently managing director for the company's Middle East and Pakistan region.
Updated: July 29, 2020 04:57 PM