Agthia recently announced its financial results for Q1FY2024, reporting 23% year-on-year revenue growth to AED1.45bn (US$394.8mn) and 32% year-on-year net profit growth to AED128mn (US$34.8mn) this quarter.
Thank you for reading this post, don't forget to subscribe!Agthia Group CEO Alan Smith attributed these results to strong performance across all of the company’s segments from snacks to water, lauding this as a significant achievement ‘amidst a volatile backdrop’.
“Some of the challenges faced this quarter included a 19% devaluation in the Egyptian Pound [which affected] Egypt, one of our major markets; and we also saw a rising interest rate that grew 0.4% year-on-year from Q1 last year,” he told the floor at the investor’s meeting to announce the results.
“This solid net profit came even after absorbing the impacts of devaluation – pre-devaluation, the net profit growth would have been 38.7%.
“The performance of the snacking category was particularly notable at 43% growth year-on-year – this included the Abu Auf brand that grew 84% [and] Al Foah which has shown strong value growth across retail channels in the UAE and international markets such as India, South Africa and Bangladesh.
“We also saw the first positive growth in our Protein and Frozen segment [comprising mostly poultry products] since Q3FY2022; and have managed to maintain our market leadership of bottled water in the UAE.”
Speaking on the need to keep focusing on Egypt despite the volatile economic conditions, he added that the strategy for this market is being developed on Egypt as an export hub.
“We consider Egypt an emerging market with high potential [despite the currency devaluation],” he said.
“It is also being developed based on an ‘Export Hub’ strategy [as despite the current conditions] we saw AED24.4mn (US$6.64mn) in exports from Egypt this quarter, covering many of our major brands such as Abu Auf and Al Ain.”
The firm has also made a deep dive into its company-wide digitalisation roadmap, covering major areas such as the development of its Agrivita e-commerce platform and launching its AI-based food safety solution.
“Agthia has a five-year digital roadmap with clear priorities, where we aim to develop a seamless omnichannel experience [and become] a strong e-commerce brand as well,” he said.
“A key component here is to accelerate our digital transformation by adopting AI, and to this end we have signed an MoU with Microsoft UAE focusing on revolutionising customer experiences with AI, establishing smart retail stores and enhancing employee engagement and learning.
“This past quarter, we have also successfully rolled out a safety AI image recognition solution to alert and report on potential safety occurrences at our manufacturing plants [and developed the] Agrivita application as a farmer’s marketplace.”
Protein progress
Building on the successful category comeback of its protein sector, Agthia also plans to invest further in this category in the Saudi Arabian market.
This is an anticipated AED87.5mn (US$23.8mn) in funds to expand its protein facility in Jeddah, so as to strengthen the production for some 40 protein products and drive further growth of this vertical.
The expansion will be launched in Q2 this year.
