Agthia Group PJSC, one of the region’s leading food and beverage companies, announced recently its results for the six-month period ending 30 June.
Agthia delivered strong performance during H1 2024, on track to meet its full-year 2024 guidance. The group’s profitable growth across all four segments, combined with leveraging group-wide efficiencies, resulted in both Group EBITDA and Group net profit growing faster than revenue.
H1 2024 financial highlights
Group net revenue increased 14.7 percent year-on-year to AED 2.5 billion (11.2 percent growth from volume and 3.5 percent from pricing). Excluding AED 120 million one-off wheat trading sales in agri-business recorded in Q1 2024, the year-on-year net revenue growth was 9.3 percent. This was primarily driven by a continued shift of the group’s product portfolio towards higher growth segments in key target markets, along with innovations. Notably, 45 percent of Agthia's growth in H1 2024 came from innovation alone (excluding one-off in Q1 2024). Group revenue, adjusted for the impact of currency devaluation in Egypt (AED -144.5 million), increased by 21.3 percent year-on-year. Despite the FX impact, Agthia’s Egyptian businesses combined delivered 20.3 percent year-on-year revenue growth in AED terms during the reporting period.
Snacking
Revenue rose 19.5 percent year-on-year, led by the strong performance of the coffee segment, where Abu Auf continued to gain both volume and value share in the local market for premium-branded coffee in Egypt. Abu Auf’s H1 2024 growth was further supported by the ongoing organic expansion of the retail chain, opening 44 new stores, including mobile kiosks, along Egypt’s North Coast. Additionally, the dates category continued to deliver strong growth driven by innovations across mid and high-value ranges, along with an expansion in date varieties and significant value growth across retail channels in the UAE and internationally (e.g. India, Bangladesh, and Morocco). Excluding the FX impact, the segment's revenue growth was 29.6 percent year-on-year.
Protein & Frozen
Revenue grew 7.2 percent year-on-year, despite the pressure from the EGP devaluation. Excluding the FX impact, the segment's revenue growth was 24.1 percent year-on-year. In Q2 2024, Agthia opened a new protein manufacturing plant in Jeddah. This facility offers local production with better economic advantages and positions Agthia as a domestic protein supplier in Saudi Arabia. With a AED 90 million investment, the facility boasts an annualized production capacity exceeding 7,000 tonnes and houses two production lines capable of producing over 50 stock-keeping units.
Water & Food
Revenue increased 4.0 percent year-on-year, with Al Ain bottled water retaining its market leadership position. This reflects an 8.3 percent year-on-year increase in total UAE water revenue growth, fueled by premiumization and innovation, including a significant growth of glass bottled water sales. Agthia increased UAE glass bottle water capacity, which will enable the Group to triple its production of glass bottled water in the mid-term in response to strong consumer demand. Additionally, continuous improvements in customer service quality within the Home and Office Delivery business led to strong growth of 9.9 percent year-on-year during the period. International business revenue also increased by 3.5% year-on-year, with notable performance in Oman and Kuwait.
Agri-Business
Revenue increased 25.4 percent year-on-year (+5.2 percent excluding one-off wheat trading in Q1 2024). This was primarily driven by strong performance in Feed, which reflected effective sales execution, performance in Abu Dhabi Agriculture and Food Safety Authority’s compound feed program, and related new product development.
Group net profit grew 31.8 percent year-on-year to AED 190.0 million during H1 2024, with net profit margin standing at 7.5 percent, reflecting a 98bps expansion, notwithstanding FX headwinds and the introduction of income tax in the UAE.
Strong balance sheet
Agthia’s balance sheet remains robust with cash and equivalents of AED 0.4 billion and liquidity of AED 1.8 billion. The Group’s net debt to EBITDA ratio of 1.6x (net debt of AED 1.2 billion) was slightly up compared to December 2023.
Proposed cash dividends
In line with the group’s semi-annual dividend policy, Agthia’s board of directors has recommended the distribution of AED 85.7 million as an interim cash dividend (equivalent to 10.31 fils per share). This represents a 25 percent year-on-year increase. The dividend payment is subject to shareholder approval at Agthia’s next AGM.
Full-year guidance maintained
Considering both the ongoing momentum across Agthia’s business and the continuing impact of currency headwinds on the Group’s Egyptian operations, Agthia anticipates full-year 2024 revenue growth between 10 percent and 12 percent, with a 40-60bps increase in EBITDA margin and a 30-50bps increase in Group net profit margin.
Khalifa Sultan Al Suwaidi, chairman of Agthia Group, said: “Agthia continues to deliver strong performance, solidifying our growth momentum in the first half of the year. Our unwavering commitment to strengthening our business and achieving our long-term goals remains clear. This quarter's results underscore our resilience and strategic focus on driving sustainable value across our diverse portfolio. Going forward, we are well-positioned to seize opportunities in the MENA region and beyond, leveraging our strengths in innovation, digitalization, and operational excellence.”
Alan Smith, group chief executive officer of Agthia Group, said: “Agthia delivered solid top and bottom-line results in the first half of the year, reaffirming our ability to navigate effectively challenging and dynamic operating environments. Our teams maintained their focus and agility in the execution of our long-term growth strategy, and we continue our efforts to drive sustainable long-term growth by investing in our brands, capturing synergies and driving efficiency gains.
“In early July, we officially launched our state-of-the-art protein facility in Jeddah, solidifying our position and establishing one of the key growth drivers for Agthia in the largest market in the GCC. The results of the first half of the year build a strong foundation for Agthia, and we reiterate our full-year guidance. We are also pleased to confirm our first interim dividend payment, intending to return approximately AED 85.7 million to shareholders in September 2024.”
