United Arab Emirates food and beverages group Agthia has roughly 1.5 billion dirhams ($408 million) of “firepower” for potential acquisitions, its chief executive said on Tuesday.
It is particularly interested in Saudi Arabia, Pakistan, and Egypt and is in constant dialogue with companies, CEO Alan Smith said in an interview, adding it was also interested in Turkey.
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“We have a pipeline of ideas, dialogue is always ongoing,” Smith said. “We’re still committed to the inorganic growth trajectory.”
None of its potential targets would cost more than 1.5 billion dirhams so Agthia has no plans to tap the debt markets this year, he said.
It has held discussions about possibly selling additional shares, though it has no immediate plans to do so, Smith said.
Net profit surges
Agthia on Monday reported its net profit surged by 535 percent to 216 million dirhams in 2021 on revenue up 49 percent to 3.1 billion
dirhams helped by integrating four acquisitions it made last year.
Its consumer business division (CBD) contributed 70 percent of total revenue, which Smith said he hoped would rise to the company’s goal of 75 percent this year.
Its agribusiness contributed the remaining 30 percent of revenue, bringing in 931 million dirhams, marginally lower than in 2020, though profit rose slightly.
Smith said Agthia typically holds a committee meeting once a month to decide on grain purchases, but now holds those meetings weekly.
“Realistically, given the escalation in cost, we’re going to see further inflationary pressure on sales prices as the year progresses,” he said.
Agthia buys its corn and soya mostly from Latin America and its wheat from India, Smith said.
It completed its divestment of Capri Sun shares this quarter and has also exited its fresh juice business, Smith said. Both businesses were loss-making.
“We’ll make some further choices about what to keep and what to let go, but for the time being, Agri is a significant portion of the overall business,” he said.
Agthia’s board recommended a cash dividend of 0.0825 dirhams per share, which is equal to 130.6 million dirhams, up from 118.8 million dirhams in 2020.
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