Agthia, the food and beverage maker, warned of a tough year ahead as it reported a 4 per cent rise in fourth-quarter profit.
Profit rose to Dh54.3 million, compared with Dh52.3m a year earlier, while sales gained 9.2 per cent to Dh509m.
Net profit for last year touched Dh254.3m, compared to Dh231m in 2015, up 10 per cent, as net revenues grew 7.4 per cent year-on-year to Dh2.01 billion.
A slowdown in consumer consumption and a change in Abu Dhabi’s subsidy regime given to flour and animal feed businesses hit revenues during the second half of the year.
Water and electricity tariffs have risen by 23 per cent and 34 per cent respectively from January 1 in the emirate.
“While it is clear that the environment in 2017 will remain tough as we confront external cost challenges, our core business fundamentals are robust,” said Dhafer Ayed Al Ahbabi, the chairman of Agthia. “We will continue to focus on regional expansion and investment opportunities to grow sales [and] increase market share.”
Last year revenues from Agthia’s two other largest business segments, flour and animal feed, were flat.
To shore up its volume and profits, the Abu Dhabi-listed company introduced competitively priced products in flour and animal feed during the third quarter and expanded its distribution network in the Northern Emirates and export markets, according to Agthia.
“The results were better than expected,” said Sanyalaksna Manibhandu, the head of research at NBAD Securities. “Some food segments are more discretionary, such as yogurt and drinks, than others, such as grains and water, and some people might think they don’t need [the discretionary items] during tough times.”
Saudi companies such as Almarai were hit by a rise in utility tariffs in Saudi Arabia last year.
Agthia has been expanding its water business over the past two years. The segment, which includes the Al Ain and Al Bayan water brands, “continues to be a key driver of growth”, according to Tariq Al Wahedi, the acting chief executive of Agthia.
Agthia bought Dubai-based Al Bayan water company in 2015. Last year, it signed a joint venture with Kuwait’s Al Wafir Marketing Services Company to set up a water bottling plant in Kuwait to produce Al Ain Water. It also acquired the water business of Jeddah-based Delta Marketing Company, which produces the Al Ain brand water last year, but the company declined to reveal the value.
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In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
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Who is Mohammed Al Halbousi?
The new speaker of Iraq’s parliament Mohammed Al Halbousi is the youngest person ever to serve in the role.
The 37-year-old was born in Al Garmah in Anbar and studied civil engineering in Baghdad before going into business. His development company Al Hadeed undertook reconstruction contracts rebuilding parts of Fallujah’s infrastructure.
He entered parliament in 2014 and served as a member of the human rights and finance committees until 2017. In August last year he was appointed governor of Anbar, a role in which he has struggled to secure funding to provide services in the war-damaged province and to secure the withdrawal of Shia militias. He relinquished the post when he was sworn in as a member of parliament on September 3.
He is a member of the Al Hal Sunni-based political party and the Sunni-led Coalition of Iraqi Forces, which is Iraq’s largest Sunni alliance with 37 seats from the May 12 election.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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