Agthia Group PJSC is considering an acquisition as the Abu Dhabi-based food and beverage company seeks to expand in its home base and abroad, its chief executive officer said.
“We are in initial stage discussions” to buy a dairy and juice business in the United Arab Emirates, Iqbal Hamzah said in an interview in Abu Dhabi on Monday, declining to identify the target. “We are looking for an established player, we’re looking for a sizable company which can make a difference.”
Agthia, majority owned by Abu Dhabi state-run Senaat, is expanding its production lines in the U.A.E. and Turkey and is planning to introduce new products. The company earlier Monday said first-quarter profit climbed 21 percent to 59.2 million dirhams ($16 million) as sales of water and beverages rose.
The company is adding a second high-speed water bottling line, which will be ready next year, to raise capacity by about 40 percent. It’s also adding a new flour packaging facility that’s expected to start production in 2016.
“If you look dairy players in the U.A.E., on average their turnover would be around 500 million dirhams,” Hamzah said, adding the acquisition target would fall within that range. Agthia had cash, cash equivalents and fixed deposit of 521 million dirhams at the end of first quarter, according to its financial statement.
Hamzah, who took over as CEO in September 2014 after serving as chief financial officer for nine years, said Agthia is planning to increase its non-U.A.E. sales by about 8 percent in 2015 compared with about 6 percent last year. He also plans to travel to Riyadh within a month to hold discussions with a distributor for its products in Saudi Arabia.
The foodmaker’s shares have jumped 15 percent this year, compared with a 3.2 percent advance for the ADX General Index. Six analysts recommend investors buy the shares of Agthia, while three have a hold rating on the stock, data compiled by Bloomberg shows.