Agthia Reports Significant Revenue Growth Amidst Challenging Cost Conditions

Agthia Reports Financial Success

The Agthia Group PJSC, a prominent player in the food and beverage sector of the Middle East, recently unveiled its financial results for the third quarter and the first nine months of 2026. Despite facing an increasingly challenging cost environment, the company's revenues have shown a remarkable upward trajectory.

In Q3 2026, Agthia's revenue soared by 14.4% year-on-year, reaching 1.3 billion UAE Dirhams, including one-off sales of 104.7 million Dirhams. When adjusted for these one-time sales, the growth reflected a more moderate but still healthy 5.2%. This development is largely attributed to a solid balance sheet and enhanced operational efficiency, leading to higher profitability.

The company's EBITDA surged by 39.0%, amounting to 123.1 million Dirhams, while the net profit increased to 33.2 million Dirhams, a remarkable jump from only 4.1 million Dirhams in the same quarter last year, primarily impacted by impairment charges in the Snacking division. During the first nine months of the year, the total revenue rose by 9.6% to 3.9 billion Dirhams, and the EBITDA rose by 36.7%, reaching 433.6 million Dirhams. Notably, the net profit almost tripled to 154.6 million Dirhams.

Agthia's financial health remains robust; the free cash flow in the first nine months stood at 212.1 million Dirhams, a significant turnaround from cash outflows in the previous year. Furthermore, the net debt-to-EBITDA ratio improved from 2.9 times in December 2025 to 2.4 times, alongside liquid assets amounting to 536.2 million Dirhams.

Performance by Segment

The Water and Food segments experienced substantial growth, with revenues increasing by 36.7%. This included one-off sales related to food security initiatives in Q3 2026. The core business also performed admirably, with UAE Water's revenue climbing 8.0% without these one-off sales, primarily fueled by a 12.9% increase in home and office service sales. International growth was supported by operations in Turkey and Kuwait, although higher costs for PET, freight, and distribution impacted the segment margins.

In the Agri-Business segment, the company saw a revenue increase of 10.5%, driven by an 18.3% rise in feed sales. However, segment EBITDA fell by 39.3% to 31.4 million Dirhams, with a decrease in EBITDA margin attributed to rising procurement costs exacerbated by higher distribution costs.

The Snacking business has shown continued profitability improvements, with gross margins increasing by 613 basis points during Q3, as all business areas made strides. Notably, the Abu Auf brand reported a 21.7% revenue increase, expanding its store presence with a net addition of 69 locations and gaining market share in ground coffee by 1 percentage point. The segment’s EBITDA rebounded to 23.8 million Dirhams from losses incurred in the previous year, highlighting successful restructuring efforts.

In the Protein and Frozen category, revenue grew by 25.1% in Q3, with all business lines contributing to this growth, particularly Nabil, which recorded a 25.3% increase. The expansion of production facilities in Saudi Arabia has nearly quadrupled sales of protein products in that market.

Leadership Insights

Khalifa Sultan Al Suwaidi, Chairman of the Board of Directors at Agthia, remarked that the past months have severely tested supply chains across the region, emphasizing the value of resilient food companies. He expressed confidence in Agthia's ability to navigate these challenges while continuing to support its markets. Al Suwaidi highlighted the management's strides in restructuring the company, which instills confidence in the board regarding the creation of long-term value for shareholders and communities.

Salmeen Alameri, the Managing Director and CEO of Agthia Group, noted, “Our transformation is ongoing. Over the past year, we have strengthened our portfolio and streamlined operations, gradually reflecting positive results. We are taking decisive actions to protect our business against mounting procurement and logistics pressures while increasing our competencies in innovation, data, and digitalization, which will be crucial for our competitive advantage.” Agthia appears well-positioned to thrive in an increasingly volatile market.