By: Thabet Shehata

Dubai – Mubasher: Profits of the Dubai Financial Market’s (DFM) consumer staples sector retreated compared to figures from 2013, following a loss incurred by United Kaipara Dairies Co. along with slow profit growth for Emirates Refreshments Co. (ERC).

Financials for the five firms listed within the sector showed a decline in net profit to AED 97.45 million ($26.53 million) in 2014, compared to AED 108.15 million ($29.4 million) in 2013.

The DFM’s five consumer staple-listed firms are: Dubai Refreshments Co. (DRC), United Foods Co. (UFC), Gulfa Mineral Water and Processing Industries, ERC and United Kaipara.

Moreover, profits for the five companies during the fourth quarter of 2014 plunged by 85% to AED 2.84 million against AED 19 million in Q4-13.

Analysts point to the sector including small companies that do not have a major effect on the DFM, particularly after new stocks were included. The sector might have a heavier weight in the market if new and bigger companies in the retail field become listed, the analysts added.

Reda Mousallem, a managing partner at Truth Economic Consultants, said there are plans to include consumer complexes in the UAE’s economy ministry, which may result in such complexes becoming public companies.

Should these complexes become public firms in the UAE and get listed on stock exchanges, this will be a strong addition to the consumer staples sector on the markets, Mousallem said in an exclusive phone conversation. The decline in companies’ profits was mostly due to Kaipara’s losses along with Emirates Refreshments seeing slow profit growth.

Dubai Refreshments recorded the highest profits on the DFM’s consumer staples sector with a net profit reaching AED 140 million against AED 123 million, a 13.8% rise. Moreover, the refreshment firm’s Q4 profits inched up by 0.04% to AED 33.4 million against AED 33.39 million in Q4-13.

The profit increase was driven by the local market’s strong growth as well as an increase in exports and a cutting of operational expenses, DRC said.

On the other hand, Emirates Refreshments registered the least profits in the sector, reaching AED 1 million in 2014 against AED 545,400 in 2013, a leap of 83.7%.

However, ERC’s net profits for the fourth quarter declined by 15.6% to AED 246,000 against AED 291,000 in Q4-13.

Kaipara United Dairies reported a net loss of AED 66 million in 2014 compared to a net loss of AED 34.5 million in 2013, deepening losses by 91.6%.

Moreover, Kaipara’s financial statements for the fourth quarter revealed a net loss of AED 36 million against a net loss of AED 16.76 million a year earlier, recording a significant rise in losses by 115%.

As for the DFM’s newly-listed Marka, financials showed a net loss of AED 15.7 million ($4.3 million) for the period from 23 June to 31 December. Marka’s losses in the last three months reached AED 13.6 million.

The newest stock on the DFM’s consumer staples sector was incorporated on 23 June, 2014, and received its licence on 9 July of that year, commencing trading on the DFM on 25 September.

Translated by: Nada Adel Sobhi