AGTHIA Group, one of the UAE’s leading food and beverage groups, has reported a net profit of Dh104.5 million (28.45 million) for the first half of 2014, an increase of 21 per cent year-on-year driven primarily by higher sales and an overall improvement in the profit margin. Net sales increased by 8 per cent for the first six months of 2014, reaching Dh822.6 million.

The Agri Business Division, which produces and distributes Grand Mills flour and Agrivita animal feed products, recorded net sales of Dh532.4 million in the first half of 2014, up 8 per cent on the same period the previous year. Net profit was Dh113.4 million, an increase of 21 per cent year-on-year, resulting from higher volumes and improved margins. The improvement in gross profit margin was the result of competitive sourcing of grains, ongoing cost saving initiatives, favourable product mix, in house production of previously outsourced animal feed and stable flour pricing in the Northern Emirates. The expansion of poultry feed production capacity is underway with completion planned for quarter four of this year.

The Consumer Business division, which produces and distributes products including Al Ain Mineral Water, Yoplait fresh dairy products and Capri-Sun juices, saw net sales of Dh290.2 million in the first six months of the year, an increase of 7 per cent on the same period in the previous year. Second-quarter net sales of Dh159.8 million and profit of Dh14.6 million reflect a strong 11 and 19 per cent year-on-year growth respectively.

The Water and Beverage segment recorded net sales of Dh233 million, up 5 per cent from the first half of 2013, with net profit increasing 7 per cent to Dh36.4 million. The food segment’s net sales reached Dh57.2 million, an increase of 15 per cent, and recorded a loss of Dh14.2 million mainly resulting from depressed dairy gross margin, higher marketing investment behind the segment and the pre-operating costs related to the frozen baked category.

Meanwhile, in the Consumer Business Division, expansion projects remain on track, with the commissioning in June of the new high-speed bottling line and the new modern mega distribution centre. However, the commercial launch for the frozen baked products is now scheduled for the third quarter. The delay in launch is attributed to some external regulatory factors. The trial production of selected products has already commenced.