AGT's Strategic Pivot to Packaged Foods Fuels Growth, Offsets Global Risks

REGINA, SK – August 11, 2026

In a global landscape fraught with logistical snarls and geopolitical uncertainty, AGT Food and Ingredients Inc. (TSX: AGTF) has delivered a clear growth signal: strategic focus pays dividends. The company’s second-quarter results for 2026 paint a picture of resilience, driven by a decisive and successful pivot towards its higher-margin Packaged Foods and Ingredients (PFI) business. While headwinds from Middle East conflicts buffet its processing segment, the surge in demand for pasta and other staples has become the new engine of growth, validating a strategy years in the making.

AGT reported a steady Adjusted EBITDA of $45.1 million, consistent with the prior year, but the story lies beneath the surface. The company’s PFI segment saw revenues climb an impressive 18% to $207 million, while its Adjusted EBITDA in the segment skyrocketed by 42% to $27 million. This performance was so strong that, for the first time, the PFI division became the company's largest contributor to Adjusted EBITDA on a year-to-date basis—a milestone that underscores a fundamental shift in the company's operational center of gravity.

The New Engine of Growth

The driving force behind the PFI segment's success is a combination of savvy investment and alignment with powerful consumer trends. Strong growth in Turkish pasta and the burgeoning “Better for You” pasta category in the United States highlights AGT's ability to capture demand in key international markets. This isn't a fleeting success; it's the result of targeted capital allocation into assets like its pasta facilities in Türkiye, which are now bearing significant fruit.

CEO Murad Al-Katib celebrated this strategic victory in the company’s earnings release. "Our focus on bringing high quality and affordable staple foods is showing good results with strong order books in our branded, private label and B2B food ingredients, and for the first time our Packaged Foods and Ingredients segment was the Company's largest contributor to Adjusted EBITDA on a year-to-date basis," he stated. This shift from a traditional commodity handler to a value-added food provider is now visibly paying off.

This growth aligns with long-term market trends where consumers globally are prioritizing affordable, nutritious, and plant-based foods. AGT’s portfolio of pulses, pasta, rice, and cereals is perfectly positioned to meet this demand. The company is not just riding this wave but actively building capacity to lead it, with management targeting an expansion of the packaged foods and ingredients segment's EBITDA margin from its current 12% to 14% by 2029.

A Fortified Balance Sheet

A critical signal of AGT’s momentum is its dramatically improved financial health. The company's Q1 2026 Initial Public Offering (IPO) and a concurrent private placement with Fairfax Financial were nothing short of transformative. The proceeds were used to execute a massive deleveraging, with total debt reduced by approximately $920 million in the first quarter.

The impact is starkly visible in the company’s leverage ratio. The Adjusted Net Debt to Adjusted EBITDA ratio plummeted from a burdensome 3.35x at the end of 2025 to just 0.49x as of June 30, 2026. This fortified balance sheet provides a powerful combination of stability and flexibility, insulating the company from market volatility and empowering strategic action.

This newfound financial strength is directly fueling shareholder value. Adjusted Free Cash Flow jumped 39% year-over-year to $23.4 million for the quarter, bolstered by both strong operating performance and significantly lower financing costs. This robust cash generation supports AGT’s commitment to shareholder returns, evidenced by the declaration of a $0.05 quarterly dividend and the opportunistic repurchase of 28,500 shares for $0.5 million under its approved Normal Course Issuer Bid (NCIB).

Navigating Global Crosscurrents

While the PFI segment shines, AGT's results also reveal the vulnerabilities inherent in a global business. The company’s Value Added Processing (VAP) segment, which relies heavily on global logistics, faced headwinds from “higher shipping costs and delays resulting from the ongoing geopolitical challenges in the Middle East.” These disruptions are not unique to AGT but reflect a broader strain on international supply chains, impacting costs and timelines across industries.

Despite these challenges, AGT is signaling resilience. The company has a strong order book for its food security programs for the second half of 2026, with management expecting margins to remain consistent with 2025. This suggests that while near-term logistics are a challenge, underlying demand in the VAP segment remains robust, with a potential for sales to accelerate as geopolitical tensions eventually ease.

This split performance between its segments offers a nuanced view of the company: one part of the business is navigating external, macro-level disruptions while another, more consumer-facing segment, is executing a growth strategy with remarkable success. This diversification is proving to be a key strength.

Investing in the Future of Food

Looking ahead, AGT is channeling its financial strength into strategic investments that align with its long-term vision. The company’s capital expansion projects are progressing on schedule and on budget, most notably a new plant in India that is set to begin commissioning in late 2026. This facility is strategically positioned to provide cost-competitive access to key export markets in Europe and the U.S., further strengthening AGT’s global supply chain.

In parallel, the company is doubling down on its success in the U.S. market with expansions at its Minot plant, specifically designed to service the growing demand for its “Better for You” product lines. These disciplined, modular capital projects are designed to meet proven demand rather than speculative M&A, a sign of prudent capital allocation.

As CEO Murad Al-Katib noted, these moves are about positioning the company for what’s next. “Let's not forget that food security, nutrition and affordability are high on the minds of consumers and governments around the world. AGT is uniquely positioned to continue to capitalize on these opportunities in both food security sales and packaged food sales in the coming quarters.” This dual focus on serving large-scale food security needs and the discerning consumer palate demonstrates a clear and compelling path for sustained business momentum.