Agthia profit growth slows on subsidy changes

Agthia reported slower profit growth for the third quarter because of changes in flour and animal feed subsidies and a slowdown in UAE consumer categories.

The food and beverage company, whose brands include Al Ain water and Grand Mills flour, announced profits of Dh54.8 million for the three months to the end of September, a 1.1 per cent increase on the same period last year, coming in just below analyst estimates.

Revenue rose 2.7 per cent rise to Dh477.8m boosted by the performance of its bottled water division, which has seen a 27 per cent increase in revenues over the first nine months of the year.

Agthia said that it intends to “land an acquisition in the water category in the GCC” before the end of the year, giving no further details.

The company warned in August that changes to subsidies on flour and animal feed would impact its net profit for this year to the tune of up to Dh20m.

Subsidies on flour were removed for Agthia’s retail, trading and catering business lines in September, with subsidies on bakeries set to be removed in August next year.

Animal feed subsidies were removed for municipality and distributor channels in July, but remain in place for commercial farms.

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