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Agthia Group Reports AED 1.58 Billion Net Revenue During the First Nine Months of 2020
Agthia Group Reports AED 1.58 Billion Net Revenue During the First Nine Months of 2020
• Revenue recorded AED 492.1 million at a 1.2 percent year-on-year growth in Q3
• Bold steps taken to reform working capital and enhance the quality of earnings 
• Enhancement of certain departments and introduction of few new roles to prepare for future success
Abu Dhabi, UAE, November 1, 2020:  Agthia Group PJSC, a leading food and beverages company in the region, and part of ADQ, one of the region’s largest holding companies with a broad portfolio of major enterprises spanning key sectors of Abu Dhabi’s diversified economy, announced the Group’s net revenue reached AED 492.1 million for the third quarter, a 1.2 growth verses Q3 2019. This increase raises Agthia’s net revenue to AED 1.58 billion during the first nine months of 2020, which is equivalent to 2.2 percent y-o-y growth compared to the same period last year. 
In the third quarter, Agthia Group has taken the strategic decision to improve the long-term quality of its earnings and to strengthen its balance sheet. As a result, additional impairment / adjustments of AED 59 million were booked in Q3, with which total impairment / adjustments year-to-date would be AED 82 million leading to a year-to-date net profit of AED 10 million. 
On a like for like basis net of one-off impairment / adjustments, our normalized year-to-date net profit would be AED 92 million. 
H. E. Khalifa Al Suwaidi, Chairman of Agthia and Chief Investment Officer at ADQ, said, “2020 continues to be a transformational year for Agthia in an unprecedented business environment. Despite that, the Group’s Q3 2020 financial results underscore our plans to reset the fundamentals of the business with a focus on growth. Whilst our Board, CEO and leadership team are continuing strategic reviews, bold steps have already been taken by the team to re-set the base for future success. The Group has developed new departments and divisions specialized in marketing, consumer business, mergers and acquisitions, which aim to expand our products share in the local and international market. This ongoing focus on step-changing the capability and profile of the leadership team to support the agenda, reinforces Agthia’s firm commitment to contribute to preserve market leadership across core categories, uphold and protect shareholder value.”
Alan Smith, Chief Executive Officer of Agthia, said, “Agthia Group continues to be wholeheartedly committed to producing essential and trusted food and drinks that nourish the communities in which we operate. Our resilience is further underpinned by our robust balance sheet and liquidity position. Strategically, the management decided to adopt a prudent policy to encourage cost savings initiatives across our value chain and take the lead in recording all foreseeable impairments deemed necessary to improve the long-term quality of earnings. We are confident in the recent strategic moves made across the region, as a key driver of our new business objectives and direction.”
Based on an in-depth evaluation, Agthia has created a long-term vision in order to reform working capital, enhance the quality of profits and strengthen the company’s balance sheet to prepare for the next stage of growth. Agthia Group’s in-depth evaluation this last quarter indicated a decline in earnings, and it focused on 4 main areas:
a. We have signed a mutual agreement with Capri-Sun to end the licensing relationship by December 2020. The business will transfer back to the brand owner from January 2021. This has resulted in a one-time AED 9.5 million full impairment of assets and inventories.  
b. Changes in our Community Support Division: As part of our continued partnership with municipality and this strategically important channel, we are pleased to announce that we are now taking over and automating the payment/collection process of consumer sales ourselves. This decision will bring us closer to consumers, give us real-time data, but results in a one-time accounting adjustment amounting to AED 7.7 million.
c. Bad Debt Provisioning: Given the ongoing liquidity issues in the market, we have conducted an in-depth review of certain outstanding receivables and re-assessed the risk of recovery. This has dictated an additional short-term impact of AED 38 million in Q3 meaning an aggregate of AED 58 million of bad debt provisioning for YTD. This has been driven by the most distressed channels in the UAE (primarily Food Service) and international markets.
d. Portfolio Rationalisation: Covid-19 has forced many companies to re-look at their portfolio complexity and take proactive decisions to simplify and bring long term benefits by removing non-productive SKUs and eliminate slow moving finished goods and raw and pack inventories. Whilst the full portfolio review will be finalised in Q4, we have conducted a comprehensive review of our slow moving and obsolete inventories and have made net provisions of AED 7.2 million for the period to account for the known risk.
Meanwhile, Agthia is evaluating the non-binding offer it has received from General Holding Corporation PJSC (“Senaat”) to combine Al Foah Company LLC (“Al Foah”), with Agthia Group. 
Furthermore, Agthia’s water portfolio—Al Ain Water, Al Bayan, and Alpin— preserved a leading market position in the retail channel with respective volume and value shares at 29.3 and 26.2 percent. 
The group’s total assets as of 30 September 2020 stood at AED 3.2 billion, up 2.7 percent versus year-end 2019, in tandem with higher cash balance. Group shareholders’ equity stood at AED 1.9 billion for the same period. 

Posted by : Dubai PR Network Editorial Team
Viewed 4819 times
PR Category : Banking & Investments
Posted on : Sunday, November 1, 2020  10:08:00 AM UAE local time (GMT+4)
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