Agthia posts 11% revenue decline in Q1 2025 amid operational pressures, strategic expansion
This drop was attributed to the absence of a one-off wheat trading activity in Q1 2024, the sharp devaluation of the Egyptian pound and persistent operational challenges
UAE – Agthia Group PJSC, a major food and beverage player in the MENA region, has reported revenues of AED 1.3 billion (US$ 354 million) for the first quarter of 2025, marking an 11.4% year-on-year decline.
According to the company, this drop was attributed to the absence of a one-off wheat trading activity worth AED 120 million (US$ 32.7 million) recorded in Q1 2024, the sharp devaluation of the Egyptian pound in March 2024, and persistent operational challenges in the dates business.
However, when adjusted for these factors, the Group’s core revenue showed a year-on-year increase of 5.2%, indicating underlying resilience in its diversified portfolio.
EBITDA fell 20.2% year-on-year to AED 185.7 million (US$ 50.6 million), with margins at 14.5%, while net profit dropped to AED 86.1 million (US$ 23.4 million), affected in part by the newly implemented Pillar II corporate tax in the UAE, which raised the Group’s effective tax rate to 19.3%, up from 13.5% a year ago.
Alan Smith, Agthia Group CEO, expressed confidence in the company’s diversified strategy.
“While we acknowledge short-term pressures in select segments, we are not defined by them. Strength in Water and Agri-Business, strategic acquisitions, and operational momentum are laying a strong foundation for sustainable, profitable growth.”
Agthia ended the quarter with AED 321 million (US$ 87.5 million) in cash and equivalents and a Net Debt-to-EBITDA ratio of 2.4x, maintaining robust financial flexibility to support ongoing investments and strategic initiatives.
Segment performance overview
Agri-Business reported a year-on-year decline due to the absence of last year’s wheat trading deal. However, adjusted figures show a 2.9% revenue growth. EBITDA in this segment surged 16.1%, aided by commodity tailwinds and cost efficiencies.
Snacking saw an 8.2% revenue drop, largely due to lower sales and reduced pricing in the Dates business. Abu Auf also faced margin pressure from rising coffee costs, though BMB posted strong double-digit EBITDA growth through portfolio strength and cost controls.
Agthia increased its ownership in Abu Auf from 70% to 80% to deepen integration and unlock growth potential.
Water & Food emerged as a strong performer with a 10.6% revenue increase, driven by robust bottled water demand across the UAE, Turkey, and KSA. Al Ain Water secured high-profile contracts, including with the Marriott Group UAE. Segment EBITDA grew by 17.6%, with margins expanding to 17.5%.
Protein & Frozen experienced a 15.7% revenue decline, hit by continued weakness in Egypt and reduced exports from Jordan.
According to Agthia, the segment’s margins were pressured by high raw material costs and fixed costs tied to the ramp-up of its new KSA facility. Nonetheless, Atyab recorded a 158bps EBITDA margin improvement, and Phase II of the KSA expansion is on track for early 2026 completion.
Strategic growth and innovation
Agthia continues to bolster its strategic position through acquisitions and innovation. The Group’s board approved the acquisition of Riviere, a prominent bottled water player in the UAE, further strengthening its direct-to-consumer presence.
According to the company, innovation contributed AED 45 million (US$ 12.3 million) in Q1 revenue. Highlights include new product launches in the Snacking segment such as date-sweetened chocolates and espresso capsules, premium revamps in Water & Food packaging, and product refreshes in Protein & Frozen like relaunches of cold cuts and luncheon meats.
Digital transformation also advanced, with e-commerce revenue rising 18.7%, now constituting 5.6% of Group revenue.
On sustainability font, Agthia reduced absolute water consumption by 8.5% during the quarter and continued community engagement through initiatives like “A Million Pieces of Bread” with Khubza Bakery.
The company was also awarded Gold as Sustainable Brand Owner of the Year 2025 for its 100% recyclable packaging for stuffed dates. A new Smart ESG Platform, integrating over 150 KPIs, was introduced to enhance transparency and performance tracking.
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