Agthia Group announced on Thursday its results for the three-month period ending 31 March 2024. Agthia delivered a strong performance during Q1 2024, on track to meet its full-year 2024 guidance. The Group’s profitable growth across the snacking, water & food, and agri-business segments, combined with leveraging group-wide efficiencies, resulted in both Group EBITDA and Group net profit growing faster than revenue.
Alan Smith, CEO of Agthia Group stated: “Our revenue growth in Q1 2024 was driven by a 17.5% growth in volume and a 5.1% increase in pricing. But what is also important to highlight in addition to our group revenue growth, is the fact that we managed to sustain our EBITDA margins on an annual basis standing at 16%, while our net profit margins increased to 8.8% from 8.2% in Q1 2023.”
On the segments that drove the group profitability Smith said: “All our segments contributed to our revenue growth in Q1 2024. Snacking revenue increased by +17.7%, Protein, and frozen revenues increased by +16%, Agri-business +10.5% (excl. one-off) water and food by +3.5%. when it comes to our snacking segment revenue growth was driven by coffee and dates’ notable performance during the quarter. As for the Water and food segment, UAE water revenue rose by 5.9% year-on-year, while international business revenue increased by 8.3% year-on-year, with a notable performance from Kuwait (+21.0%) and Oman (+14.2%). Regarding our Protein and Frozen segment, it reported the first revenue growth since Q3 2022 of 15.9% in UAE dirhams. In Egypt, robust pricing and a favorable mix across domestic channels supported the segment, while we have achieved double-digit growth in revenue from domestic and export frozen vegetables. And finally, Our Agribusiness revenue excluding the one-off trading sales of Dh120 million, increased by 10.5% year-on-year, mainly due to increased volume.
Smith also sees that Agthia Group’s growth margins as sustainable. He further added “Our margin expansion was mainly driven by many factors besides commodity costs. One factor was increased efficiencies, and another was the enhanced category mix and increased Innovation as drivers for margin expansion. If we look at agriculture commodities, there are a lot of factors that are driving prices to historical highs. Some have to do with climate change and poor weather, others have to do with structural dynamics of supply and demand. Do prices fairly reflect these dynamics? Not really. We believe that there is some speculative action taking place and so there will be a kind of price adjustment most likely in Q3 as the data for new crop becomes available.”
Agthia continues to focus on market share across all verticals and its strong financial position helps us even in challenging markets. It is also focusing on balancing market leadership and implementing initiatives to shore up margins (brand tiering, channel mix, price pack architecture. Commenting on Agthia’s pricing strategy amidst the current uncertainties in the economic scene, Smith said: “Our operational cost-effectiveness, product formulation, automation, integration, etc.) – it’s not all about pricing. We are always mindful of the challenges consumers in certain markets are going through and we are doing our utmost to limit these challenges where possible, by utilizing the variety of initiatives at our disposable rather than focusing solely on pricing.”