Unikai Foods

1. Company Overview & Earnings Context

Unikai Foods (P.J.S.C.) operates in the food products business, with activities covering dairy, juice, ice cream and other food products. The Group also operates in Oman through its wholly owned subsidiary, Unikai and Company LLC, which is engaged in trading various food products.

Unikai reported modest revenue growth but significantly weaker profitability in H1 2026. Revenue increased to AED 223.81 million, while net profit declined to AED 7.26 million from AED 16.06 million in H1 2025.

2. Financial Performance Snapshot

• Revenue: AED 223.81 Million (+1.9% YoY)

• Gross Profit: AED 71.91 Million (-1.6% YoY)

• Operating Profit: AED 10.98 Million (-32.8% YoY)

• Profit Before Tax: AED 8.23 Million (-54.2% YoY)

• Net Profit: AED 7.26 Million (-54.8% YoY)

• EPS: AED 0.19, vs. AED 0.41 in H1 2025

The results show that while Unikai maintained its top line, higher costs and lower non-operating income placed significant pressure on earnings.

3. Revenue Growth & Geographic Performance

Revenue increased from AED 219.61 million in H1 2025 to AED 223.81 million in H1 2026, representing growth of approximately 1.9%.

Geographically:

• UAE Revenue: AED 129.79 Million (+2.0% YoY)

• Oman Revenue: AED 88.79 Million (+6.8% YoY)

• Other Markets: AED 5.23 Million (-43.1% YoY)

The UAE remained Unikai's largest market, accounting for approximately 58% of total H1 revenue, while Oman contributed around 40%.

The Group also reported that no individual customer represented more than 10% of total revenue, limiting concentration on any single major customer.

4. Key Performance Drivers

Despite higher revenue, cost pressures affected profitability. Cost of sales increased to approximately AED 151.90 million from AED 146.56 million, causing gross profit to decline slightly.

Administrative, selling and distribution expenses increased to AED 60.93 million from AED 56.95 million, contributing to operating profit falling approximately 32.8% to AED 10.98 million.

Finance costs also increased to AED 5.93 million from AED 5.40 million, while other non-operating income declined sharply to AED 3.18 million from AED 7.01 million.

Together, these factors resulted in net profit falling 54.8% YoY, despite the increase in revenue.

5. Balance Sheet, Borrowings & Cash Flow

Unikai ended June 2026 with:

• Total Assets: AED 358.66 Million

• Total Equity: AED 94.90 Million

• Total Liabilities: AED 263.76 Million

• Bank Balances & Cash: AED 33.35 Million

• Inventories: AED 67.08 Million

• Trade & Other Receivables: AED 101.79 Million

• Interest-Bearing Borrowings: AED 139.47 Million

Borrowings increased significantly from AED 88.75 million at the end of 2025 to AED 139.47 million, mainly due to higher trust receipts used to finance working-capital requirements.

Operating cash flow was also weak, with AED 16.76 million of net cash used in operating activities, compared with AED 3.38 million used in H1 2025. Unikai nevertheless ended the period with AED 24.89 million in cash and cash equivalents.

The Group also paid AED 11.65 million in dividends during H1 following shareholder approval of a cash dividend equivalent to 30% of paid-up share capital.

6. Investor Takeaway

Unikai Foods' H1 2026 results showed stable revenue but considerable pressure on profitability and cash generation. Revenue increased 1.9%, but operating profit declined 32.8% and net profit fell 54.8% to AED 7.26 million.

The key areas of concern were higher operating costs, weaker non-operating income, negative operating cash flow and the increase in interest-bearing borrowings.

At the same time, management has undertaken a detailed cost review aimed at reducing cost of sales and operating and administrative expenses. Management also forecasts positive operating cash flows and expects growth in revenue and profits for 2026 onwards.

The Group continued investing in its operations, including AED 10.1 million of property, plant and equipment additions, mainly related to the cooling tunnel for its ice cream plant.

Key areas to monitor in H2 2026 are margin recovery, cost reductions, operating cash flow, borrowing levels, working-capital management and whether revenue growth translates into stronger profitability.