Wars in the Middle East and Ukraine have proven to be challenging for Regina-based food manufacturer AGT Foods (AGTF-T), but the latest quarterly results show that the company is well-positioned to weather these storms.

During the company’s recent second-quarter results earnings call, Murad Al-Katib, its president and chief executive officer, said the Middle East war has largely been accounted for in its pricing.

“Conflict in the Middle East initially resulted in higher freight and other costs, along with some shipment delays in Q1 and Q2. AGT has now begun to incorporate these costs into new contracts. Alternative routes of transport are being utilized,” Al-Katib said.

“This will allow us to ship and reduce our inventories through contractual commitments by customers, including food-security programs currently being shipped.”

Increase in profit year-over-year

IAGT's adjusted EBITDA came in a $45.1 million, a slight increase from 2025’s results of $44.5 million.

“AGT is expecting this catch-up and new growth will positively impact our results over the next six months, which historically the second half of the year does produce our strongest results each year,” Al-Katib said.

“We believe that our targets are achievable regardless of whether or not there is peace for the Iranian war.”

AGT produces a diversified portfolio of products, from pulses, grains and packaged products such as pasta and canned beans. It has operations in five continents and sells to 127 countries from 39 manufacturing facilities.

It has been especially affected by the two conflicts at its Mersin, Turkey location.

“Shipping delays in the Middle East are estimated to have reduced revenue and adjusted EBITDA in the quarter by $57 million and $3.4 million, respectively,” he said.

However, the company expects to recover quickly from these slowdowns. “This is not lost revenue but only a shift in timing and the war and inflationary pressures in Turkey have resulted in some short-term margin compression, impacting our results.”

AGT revenues came in at $634.2 million, which represented an increase of two per cent from $623.6 million in the same quarter last year.

These positive results come as the company has completed its IPO and majority investment from Fairfax Financial early in 2026. Its 2025 numbers included lower revenue and a loss.

Packaged foods now strongest division

For this quarter’s results, one segment in particular has become the company's top producer, according to Bill McFarland, board chair, who also spoke during the earnings call.

“We are seeing encouraging results from the strategic investments made over the last several years, within our packaged food and ingredients segment, which became for the first time AGT’s largest contributor to adjusted EBITDA during the first six months of 2026.”

Revenue in that segment grew by 18 per cent, while adjusted EBITDA increased 42 per cent, according to the company.

The packaged food division produces more than 1,400 retail-ready products.

On improving cash flow, which is one of the company’s key objectives, AGT is moving forward in a positive direction.

“Adjusted free cash flow increased 39 per cent year-over-year, demonstrating the strength of the business model, and 52 per cent of adjusted EBITDA was converted to adjusted free cash flow during the quarter, showing strong results and strong trajectory,” Al-Katib said.

Company ‘undervalued’ in market

The new cash flow should come in handy, as AGT has also offered a normal course issuer bid (NCIB) for approximately three million shares, after purchasing 28,500 common shares during the quarter.

“We think that we’re undervalued, so from that perspective an NCIB should be utilized to stabilize your stock and to repurchase when you hit your target areas,” Al-Katib said in response to an analyst’s question.

“We’ve got free cash flow to use so, if it’s needed, we will. But we expect that institutions are going to step in and buy our stock. We’re consistent in a time of uncertainty. Our packaged foods and ingredients performance has been great, and it’s going to continue to be great,” he said.

But the company is also expecting even more flow into its cash reserves, according to Harley Ulmer, global corporate treasurer, who also spoke at the earnings presentation.

“AGT’s balance sheet is substantially stronger following the IPO and the Fairfax private placement, and this will allow us to fund growth investments and execute our strategy going forward.”

“We are on target to exceed $100 million of adjusted free cash flow in 2026,” Ulmer said.