(MENAFN Press) Agthia Group P.J.S.C., a leading Abu Dhabi based food and beverages group (ADX: Agthia), today reported its financial results for the first quarter ended 31 March 2009.
Strong revenue growth, up 20% to AED 222 million compared to AED 186 million in Q1 08
Strong increase in net profits to AED 46.5 million from AED 18.4 million in 2008, up 152% year on year.
Earnings per share more than doubled to AED 0.077 versus 0.031 per share in Q1 08
Commenting on the results, His Excellency Rashed Mubarak Al Hajeri, Chairman of Agthia, said, The results for the first quarter of 2009 represent a positive start to the latest phase of the companys strategic development. Despite the scale of the global economic turmoil, Agthia remains largely unaffected, reflecting the strength of the companys strategy, the success of its execution and the defensive qualities of the Food and Beverages sector.
Ilias Assimakopoulos, Chief Executive Officer of Agthia, added, These strong first quarter results once again demonstrate the companys continuing growth momentum. This is the ninth consecutive quarter that management has delivered strong operational and financial results, placing Agthia in an ideal position to continue its rapid development and achieve its objective of becoming one of the leading food and beverages companies in the UAE.
Consolidated Results Analysis
Results were strong across all of Agthias businesses, with each division delivering strong revenue growth. Group sales for the quarter reached AED 222 million, up 20% from 2008 (12% excluding new businesses not included in last years result). Revenues were predominantly driven by increases in sales volumes, with operating companies Flour and Feed and Al Ain Beverages delivering year on year revenue increases of 11% and 30% respectively. The Tomato Paste and Frozen Vegetable business (TP & FV), not consolidated in quarter 1, 2008, contributed 5%, or AED10 million, to revenues this quarter. Improved brand strength and enhanced marketing and distribution resulted in volume growth across the business.
In terms of profitability, the results were ahead of trend in this particular quarter, which partially benefited from the inventory write-down taken in 2008, and the lower grain prices whereas the market price of flour remained unchanged during the period. This together with a drop in PET price resulted in the gross profit margin improvement. Profit for rest of the year is not expected to grow at this pace as the market prices of flour & feed products have started falling due to drop in grain prices. The Management expects the profit growth to continue, but at a sustainable trend.
Selling & General Administration Expenses (SG&A) increased 22% year on year to AED 32.8 million. The increase primarily relates to TP & FV and Capri Sun which were not included in the results the previous year. Without these new businesses the SG&A increased 4%.
Net profit was positively affected by the reasons explained above and recorded a growth of 152% to AED 46.5 million, versus AED 18.4 million in the same period of 2008. This in turn resulted in Earnings per Share for the period of AED 0.077, more than doubling from AED 0.031 per share in Q1 2008.
Flour and Feed
The combined Flour and Feed business once again delivered strong results, with net sales of AED 175.5 million, an 11% year-on-year increase. This growth was achieved through an increase in sales volumes versus the same period of last year. Gross profit doubled during the period, reaching AED 60.9 million.
Flour & Feed remains the largest division within the group, and now represents 79% of total group revenues in the first quarter, unchanged from the end of 2008 and down from 85% at the end of the first quarter of 2008. This reduction is in line with the group strategy to reduce the proportion of groups revenues from this division and follows the diversification into high margin businesses. Looking ahead, the division continues to explore expansion into value added products.
Water and Beverages
The first quarter of 2009 was a positive period for the Companys flagship brand, Al Ain, as total sales reached AED 36.5 million, a 30% increase on the same period of 2008. The Al Ain Water & Beverages business now represents 16% of group revenues.
Gross profit reached AED 15.2 million, up 37% compared to the first quarter of 2008. Gross margin also improved to 42% from 39% in the corresponding period of 2008. This improvement was realised by improved production cost efficiencies, cost saving initiatives and drop in PET prices.
The first quarter of 2009 saw the official integration of the Capri-Sun franchise into the beverages division. Production and distribution started in March 2009 and management is excited by the growth potential offered by this new venture in the UAE and beyond. The Capri-Sun business represents an important step towards the divisions aim of regional and product range expansion.
Tomato Paste & Frozen Vegetables
The Al Ain Tomato Paste & Frozen Vegetables division delivered healthy results in the first quarter of 2009, achieving revenues of AED 10.4 million. The division also recorded a gross profit of AED 3.8 million equal to a gross margin of 37%.
The Tomato Paste and Frozen Vegetable division, which was acquired in early 2008 and therefore not included in Q1 2008 numbers, is now fully integrated into the Groups financials and represents 5% of group revenues in the first quarter of 2009.