Agthia Group reports 14.7% YoY net revenue growth, 31.8% YoY group net profit growth during first half of 2024

Updated 14 August 2024

Arab News

August 14, 2024 15:59

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.”

Changan Automobile eyes Middle East Localization

Wang Jun, president of Changan Automobile and CEO of Changan

Updated 05 September 2024

Arab News

September 05, 2024 14:26

Changan Automobile eyes Middle East Localization

Updated 05 September 2024

Arab News

September 05, 2024 14:26

With Changan Automobile’s focus on the Middle East, the region has assumed a strategic significance in the Chinese automobile manufacturer’s global growth strategy. The company established Changan’s largest flagship store in Riyadh and is building user centers and parts distribution centers for the Middle East region — all aimed at significantly enhancing the user experience.

Wang Jun, president of Changan Automobile and CEO of Changan Technology, said: “We consistently uphold the mission of ‘leading automotive culture and benefiting human life,’ and are actively transforming into a smart, low-carbon mobility technology company. Our strategy clearly emphasizes delivering products, technology, and services to users worldwide. Moreover, there is user demand. In recent years, we have observed that consumers in Saudi Arabia and the Middle East increasingly prefer high-tech and sustainable vehicles and have higher expectations for an enhanced mobility experience, hence aligning deeply with our product and brand philosophy.

“Through the rapid development of smart, new energy, and intelligently connected vehicles in China, Changan has achieved a high level of global leadership, giving Chinese brands a competitive edge in this area. Changan Automobile has also made significant progress in the development of smart new energy, resulting in new, competitive products and services. We aim to offer these products and services to users worldwide, including those in the Middle East, providing them with more choices for better products and higher-quality services.”

Changan is customizing its products and services to meet the unique needs and preferences of customers in the Middle East.

Jun said: “Under the guidance of the ‘Vast Ocean Plan,’ we aim to move beyond China and integrate into local markets. We have established the Middle East and Africa Division in collaboration with investors and dealer partners, to accurately understand the local user needs, to develop versatile products and provide a customized service.

“An adaptive approach to development is essential, alongside the understanding and modification in order to fit the unique needs of Middle Eastern customers. By conducting adaptive development of vehicles based in regional geography and climate, as well as local conditions and driving habits, the products and services are designed to suit the market.

For example, Saudi Arabia is a very hot country, and we need the products to endure this extreme heat. With this in mind, since 2014 Changan has conducted extreme heat tests (Summer Test) for 10 consecutive years, involving more than 50 models, over 80 Changan engineers, and approximately 1 million kilometers of verification to enhance vehicle performance, durability, and safety. Due to these extreme heat conditions, Changan has focused on continuously optimizing its air conditioning system, making it one of the coolest in the market. In the future, we will further advance the localization of R&D capabilities.”

The president said that customized services are also very important. “Though market research we found that most Saudi users park their cars outdoors, which makes the vehicles very hot when users enter. Through our collaboration with Huawei Cloud, we are launching smart and connected car solutions in the Middle East this year, enabling remote vehicle control, allowing users to turn on the air conditioning in advance, so the car is cool when users enter. The Qibla compass is also a specialized feature we designed for Muslim drivers, helping them easily determine the direction of Makkah in order to pray, fully reflecting and respecting local cultural practices. At the same time, we are preparing to establish regional subsidiaries and exploring a ‘dual-engine’ strategy for integrated operations and regional dealer partnerships. We are also setting up a regional[21] parts distribution center in the UAE and developing a professional maintenance team to continuously improve the user experience.”

Highlighting Changan’s initiatives toward reducing its carbon footprint and promoting green technology in its vehicles, Jun said the company’s strategy is actively responding to the Saudi government’s Vision 2030 and is firmly committed to pursuing a path of high-quality development with an emphasis on ecological priorities, green, and low-carbon growth. “We will continue to strengthen ESG initiatives, promoting economic and social development in the regions where we operate, while actively fulfilling our responsibilities and obligations as a global company — specifically in areas such as resource conservation, environmental protection, and public welfare,” he added.

On the product side, Changan Automobile adheres to a multi-technology development approach. Jun said: “We have substantial technological reserves in various powertrain types, including pure electric, plug-in hybrid, range-extended, and hydrogen fuel, offering consumers a diverse range of mobility options for all scenarios.

“On the manufacturing side, the green and low-carbon concept has been integrated into all aspects and stages of Changan Automobile’s operations. Several advanced low-carbon and energy-saving technologies have been promoted and applied. Our Chongqing, Hefei, and Hebei plants have built photovoltaic power stations with a combined capacity of approximately 79 MW, generating green clean energy for self-use. Over a year, these stations have consumed 57.6 million kWh of green electricity, reducing 50,000 tons of carbon emissions.

“Changan is also strengthening its full-cycle carbon footprint management, concentrating on tasks such as a recycling system construction and comprehensive resource utilization. Through Changan, we are also exploring the establishment of advanced, easily replicable EPR models for automotive products.

“Furthermore, we promote the application of low-carbon materials and technologies, and have completed research on 15 types of low-carbon and lightweight technologies, including recycled aluminum, bio-based nylon, and variable-strength hot stamping. It is also worth mentioning that we have developed and implemented low-carbon process technologies such as circular recycling of painting, cleaning solvents, reclaimed water reuse, and sludge drying, aiming to improve resource utilization rates and achieve waste resource recovery, recycling, and emission reduction.”

Commenting on Changan’s key achievements over the past 30 years, Jun said: “We have gained global recognition and trust from our users, driven by our commitment to providing customers worldwide with new and competitive products and services. As a result, we have gained global recognition and have become the choice of over 40 million users. Furthermore, we have deconstructed the automotive industry into ‘research, production, supply, sales, and transportation’ centered around the product, and ‘buying, selling, using, repairing, and servicing’ centered around the user.”

He also mentioned the company’s partnerships with over 1,100 global suppliers and more than 9,300 global dealers, established over the years, contributing to the sustainable, high-quality development of the automotive industry.

“Our strategic goals further align with the principles of the automotive industry and are steadily advancing their implementation. Changan has always upheld the mission to ‘lead auto culture and benefit human life,’ and we are firmly committed to transforming into a smart, low-carbon mobility technology company, advancing toward becoming a world-class automotive brand. We have divided our strategic vision into specific goals for 2025 and 2030 respectively and have broken down the objectives into actionable tasks through detailed policy implementation, ensuring these goals are iterative, actionable, and achievable.”

Jun said Changan remains committed to long-termism, localization, and a focus on ESG in its globalization strategy.

He said Changan has remained at the forefront of automotive technology, including electric vehicles, smart driving, and sustainability. “We have defined a strategic plan for intelligence and this includes ‘The Dubhe Plan,’ and ‘New Cars, New Ecosystems.’ By focusing on new intelligent automative solutions we are rapidly building Changan Automobile’s core competencies in smart technology. Digital-intelligent products, technology, manufacturing, and management is also essential.

“To strengthen the organization we have also established 16 technology and product R&D centers, all focused on areas such as electronic and electrical architecture platforms, intelligent driving, and smart cockpits. This has allowed us to build core capabilities in chips, devices, maps, cores, clouds, networks, and satellites. Additionally, we have recruited over 50 experts in software, algorithms, and AI, to assemble a team of more than 2,000 individuals dedicated to creating new vehicles.”

He said the automaker is committed to ensuring that its annual R&D investment accounts for no less than 5 percent of the revenue. “Looking ahead, we plan to invest over 200 billion yuan ($28.1 billion) in intelligence and will continue to explore and promote the establishment and operation of local R&D centers, with adaptive development for local markets.

“It is also worth mentioning that we have a comprehensive product and technology system in place to ensure strong capabilities and support. We have established the CA-PDS development system, CA-TVS testing and verification system, and CA-DDS design management system, along with a robust ‘Iron Triangle’ supplier relationship, all centered around the entire industry chain. At the same time, we continuously iterate and innovate, driving transformative changes in the four major processes: R&D, manufacturing, supply, and marketing,” Jun added.

Commenting on Changan’s vision for the next decade, especially in light of the rapidly evolving automotive industry, Jun said: “Looking to the future, Changan Automobile will proactively recognize, adapt and drive change, employing strategic thinking to plan comprehensively and embrace transformation to meet any challenges. We have continually reviewed and optimized our Innovation and Entrepreneurship Plan since its 2017 launch, and we are now at version 8.0. With our focus on three major initiatives — ‘Shangri-La,’ ‘The Dubhe Plan,’ and ‘Vast Ocean Plan,’ we are fully reinforcing our development foundation.

“Further expanding our global presence, particularly in emerging markets such as the Middle East, is also key. We will continue to adhere to the development principles of localization, long-term commitment, and sustainability, to strengthen local partnerships and launch more than 10 global products in the future.”

Jun believes that acknowledging competition and continuously improving their products is the only way to navigate the challenges of the global market, particularly in emerging economies like those in the Middle East.

“Only competition can drive innovation and development. Strategic guidance is essential, and we remain committed to realizing our grand vision of building a world-class automotive brand, and using this strategic vision to guide our development,” Jun said.

He said that product excellence is also king, and the company continuously develops new technologies and solutions to maintain its industrial dominance, by consistently providing products and services that satisfy consumers.

“Full cooperation will also establish long-term sustainable systems, business partnerships, and strong communication with governments and the public ... Creating an environment of mutual respect and equality among different cultures will enable us to develop in a sustainable way in the long term,” Jun added.

1957 Ventures showcases innovative solutions at Fintech 24

Updated 05 September 2024

Arab News

September 05, 2024 09:14

1957 Ventures showcases innovative solutions at Fintech 24

Updated 05 September 2024

Arab News

September 05, 2024 09:14

Following its recent launch, 1957 Ventures is participating in the tech-focused Fintech 24 international conference, held for the first time in Saudi Arabia at the Riyadh Front Exhibition and Conference Center from Sept. 3-5.

1957 Ventures is a platinum sponsor of the conference, underscoring its commitment to driving fintech innovation in the Kingdom. CEO Emad Kashgari delivered a keynote highlighting that 1957 Ventures is backed by the largest fund of its kind in the region — a closed-end investment fund focused on venture capital exceeding SR800 million ($213 million).

Kashgari addressed the future of fintech in the Middle East and North Africa, emphasizing Saudi Arabia’s leadership in the sector. He noted that the Kingdom captured 58 percent of all venture capital invested in the MENA fintech sector in 2023, with market value projections reaching $2.4 billion by 2029.

He said that 1957 Ventures was founded to support this remarkable growth and contribute to achieving the Financial Sector Development Program goals outlined in Vision 2030. He added that fintech investments in the Kingdom have witnessed exponential growth over the past three years. In 2023 alone, investments exceeded $790 million, marking a sixfold increase compared to $91 million in 2021 and $239 million in 2022.

At the conference, 1957 Ventures showcased a number of innovative solutions in the field of fintech. This presence allows the firm to share its expertise and attract potential investors.

Further demonstrating its commitment to guiding and leading innovation in fintech, 1957 Ventures is conducting six workshops throughout the conference covering topics such as: Exploring the World of Fintech in Saudi Arabia, Governance and Compliance in Fintech, Marketing Strategies for Fintech, Building a Successful Fintech Company, Investing in Fintech, and Sustainable Growth in Fintech.

1957 Ventures will dedicate and double its efforts to building innovative financial technology companies and models. The firm will play a vital role in shaping the future of the banking and financial sector in the Kingdom by providing specialized support to ventures, including: funding and investment, guidance and mentorship, growth and sustainability expertise, technical and commercial expertise, access to target audiences.

Fintech 24 aims to advance the financial sector globally. Hosting this conference in Riyadh solidifies the Kingdom’s position as a leader in this field, driven by the increasing reliance on financial technologies. This event contributes to Saudi Arabia’s national plans and builds a thriving fintech ecosystem to enhance economic growth and diversification.

24 Fintech Day 2: barq signs additional agreements

Updated 04 September 2024

Arab News

September 04, 2024 21:50

24 Fintech Day 2: barq signs additional agreements

Updated 04 September 2024

Arab News

September 04, 2024 21:50

On the second day of 24 Fintech, barq signed several agreements with various technology and financial companies to achieve its goals of enhancing services and improving customer experience, as well as providing more innovative benefits and solutions that meet the aspirations of its customers.

Saad Al-Muhana, chief business officer of barq, signed a memorandum of understanding with Mahmoud Zou Al-Ghina, chief commercial officer of LikeCard, to improve customer experience. In alignment with this goal, Abdulrahman Al-Ageel, chief marketing and customer experience officer at barq, also signed an agreement with Abdullah Al-Dosari, chairman and managing director, T2 SMS provider. Additionally, to enhance service quality, Al-Muhana signed an MoU with Ahmed Hamdan, CEO and co-founder of Unifonic.

These agreements are part of barq’s participation at 24 Fintech, hosted in Saudi Arabia for the first time from Sept. 3-5, 2024, at Riyadh Front Exhibition and Conference Center. The event serves as a significant global platform for the fintech sector, characterized by a large turnout and participation from leading figures and decision-makers in technology and financial sectors worldwide.

barq has achieved a remarkable milestone by reaching 1 million customers within three weeks of the official launch of its application on app stores in the Kingdom. This accomplishment serves as a motivation for the company to exert further efforts to enhance its services in appreciation of its customers’ trust.

MBSC celebrates graduation of 23 leaders from MODON

Updated 04 September 2024

Arab News

September 04, 2024 21:59

MBSC celebrates graduation of 23 leaders from MODON

Updated 04 September 2024

Arab News

September 04, 2024 21:59

Prince Mohammed Bin Salman College of Business and Entrepreneurship, the Kingdom’s world-class business school, celebrated the graduation of 23 leaders from the Saudi Authority for Industrial Cities and Technology Zones, known as MODON, who completed the Advanced Leadership Program.

MBSC’s Advanced Leadership Program provides a unique opportunity for experienced professionals to hone their leadership skills with an entrepreneurial mindset. The program is designed to help participants develop their strategic thinking, problem-solving, and decision-making abilities. It also emphasizes the importance of team empowerment, innovation, and continuous learning in the modern workplace.

Dr. Zeger Degraeve, dean of MBSC, said: “The graduation of 23 leaders from MODON reflects MBSC’s growing impact and effectiveness in business education. MBSC has introduced a suite of new programs tailored to the evolving needs of professionals in the Kingdom of Saudi Arabia, and designed to equip participants with the essential skills and knowledge necessary to lead and manage effectively in a dynamic and competitive business landscape.”

MBSC has been conditionally accredited by the National Center for Academic Accreditation and Evaluation, at Education and Training Evaluation Commission, from May 2024 to April 2026.

MODON signed a partnership with MBSC to develop national leaders capable of adopting innovative thinking patterns and enhancing their leadership skills, in alignment with the Human Capacity Development Program under Saudi Vision 2030.

MODON’s Advanced Leadership Program highlights the organization’s commitment to excellence by enhancing its current leaders’ skills for strategic roles. This initiative empowers leaders with the confidence, impact, and entrepreneurial mindset needed for high performance. Partnering with MBSC ensures its leaders receive top-tier training, reinforcing its dedication to fostering a culture of excellence.

MBSC is situated in King Abdullah Economic City, a contemporary urban center that provides an unparalleled modern environment for both students and faculty. The college offers world-class education from Saudi Arabia for Saudi Arabia in both KAEC and Riyadh, delivering practical, pragmatic, hands-on experiential learning to develop a new generation of transformative leaders.

Since its establishment in 2001, MODON has been responsible for developing and overseeing industrial lands and infrastructure. It currently manages 36 industrial cities, both operational and under development, along with private industrial cities and complexes across the Kingdom. This includes 6,443 industrial facilities and more than 7,900 industrial, investment, and logistical contracts. The total area of developed land amounts to more than 209 million square meters. With the launch of Saudi Vision 2030, which positions industry as a strategic choice to strengthen the national economy and promote sustainable development, MODON has become a key entity in achieving these national aspirations.

CIP leader OPSWAT expands strategic footprint in KSA

Updated 04 September 2024

Arab News

September 04, 2024 21:59

CIP leader OPSWAT expands strategic footprint in KSA

Updated 04 September 2024

Arab News

September 04, 2024 21:59

OPSWAT, a global leader in critical infrastructure protection solutions, with headquarters in Florida, US, has seen a significant expansion of its presence in Saudi Arabia, marked by tremendous business and overall economic growth of the country over the past two years.

The Saudi cybersecurity market is surging forward, reaching a value of SR13.3 billion ($3.55 billion) at the start of 2024, making it a fertile ground for advancing the cybersecurity industry. This aligns perfectly with OPSWAT’s specialized CIP technologies and tailor-made solutions that integrate operational technology and information technology security seamlessly.

Vision 2030 focuses on enhancing the resilience and preparedness of critical national infrastructure and cybersecurity education and awareness in the Kingdom. OPSWAT’s expansion in Saudi Arabia is dedicated to protecting the Kingdom’s essential services against an evolving landscape of cyberthreats as well as addressing the need for improved educational and technical training.

Sertan Selcuk, vice president, METAP and CIS, OPSWAT, said: “Safeguarding Saudi Arabia’s critical infrastructure against the rising tide of cyberthreats is essential to the nation’s security and economic stability. OPSWAT is dedicated to supporting Saudi Vision 2030 by fortifying the Kingdom’s defenses through advanced cybersecurity training and innovative solutions. Our commitment is to ensure that Saudi Arabia’s vital assets remain resilient in the face of evolving cyber challenges.”

OPSWAT has been named the official educational partner for the MENA Information Security Conference 2024, which it is also a gold sponsor of. As part of this broader strategy, OPSWAT Academy, the educational arm of OPSWAT, will offer complimentary CIP certifications to all event attendees, tailored specifically to the needs of the region’s cybersecurity professionals.

“We are committed to equipping the next generation of cybersecurity professionals with the skills needed to safeguard critical infrastructure. Our partnership with MENA ISC 2024 opens new avenues for participants to access world-class CIP cybersecurity training,” said Irfan Shakeel, vice president of OPSWAT Academy. “This initiative is part of OPSWAT’s global SR37.5 million scholarship program, reinforcing our dedication to addressing the growing demand for certified CIP cybersecurity experts.”

Recent reports indicate a significant rise in state-sponsored cyberattacks targeting Saudi Arabia’s critical infrastructure, driven by the nation’s rapid digital transformation. With the average cost of a data breach in the Kingdom reaching approximately SR30 million, the need for robust cybersecurity measures and human resources has never been more urgent. OPSWAT’s initiatives directly address these challenges, ensuring that young aspiring Saudis receive world-class training and that the Kingdom’s essential services remain secure.

Agthia Group reports 14.7% YoY net revenue growth, 31.8% YoY group net profit growth during first half of 2024