Agility reports 19% increase in second quarter earnings

KUWAIT: Agility, a leading global logistics provider, yesterday reported second-quarter earnings of 13.8fils per share on net profit of KD 20 million, an increase of 18.7 percent over the same period in 2017.

EBITDA grew 13.6 percent to KD 37.1million. Revenue increased 12.3 percent to KD 384.2million. First-half earnings of 26.9fils per share and net profit of KD 38.9 million were up 24 percent. First-half EBITDA was KD 74.8 million, an increase of 18 percent. Revenue for the first half was KD 756 million, an increase of 14.1 percent.

Tarek Sultan, Agility Vice Chairman and CEO, said: “Our second quarter results were in line with expectations and consistent with the previous growth trend the company has been seeing. Agility’s Infrastructure companies performed well, as did our logistics business, which witnessed another quarter of volume and revenue growth despite margin pressure.”

Global Integrated Logistics (GIL) business strategy of effective trade lanes development, productivity optimization and defined tailormade solutions to customers continued to generate favorable results. GIL gross revenue grew 13.4 percent to KD 289.3 million. Net revenue rose 5 percent to KD 66.7 million, primarily due to growth in Freight Forwarding and Contract Logistics. The respective revenue and net revenue growth rates for the first half were 14.5 percent to KD 567.4 million and 6.4 percent to KD 131.3 million.

Air freight continued its strong performance in Q2, driven by solid volume growth of 14 percent and stable yields compared to the same period of last year. Air freight net revenue grew 21.9 percent in Q2 and 20.3 percent in the first half. Ocean freight had consistent volume growth but with lower yields. In Q2, container volume increased 8.2 percent vs. Q2 2017. Ocean freight net revenue grew 7.4 percent in Q2 and 7.3 percent in the first half.

Regionally, Air freight and Ocean freight performance was strongest inthe Americas, Asia Pacific and Europe. Contract Logistics continued its steady growth, primarily in the Middle East and Asia Pacific, as a result of new business and effective utilization of facilities. Contract Logistics net revenue grew 3.2 percent in Q2 and 4.5 percent in the first half.

GIL’s net revenue margin was 23 percent in Q2, down from 24.9 percent a year earlier due to yield degradation in Road freight and Project Logistics, primarily in the Middle East and Europe. GIL’s EBITDA reached KD 9.3 million in Q2, and its EBITDA margin was 3.2 percent, slightly lower than 3.6 percent in Q2 2017. In the first half, EBITDA grew 13.3 percent to KD 16.8 million. EBITDA margin in the first half remained flat at 3 percent vs. the same period in the previous year.

GIL is accelerating its digital transformation to increase the efficiency of its business processes, gain business insights, develop innovative logistics solutions, differentiate its products and better connect to its customers,

Agility’s infrastructure companies

Agility’s Infrastructure group EBITDA rose 16.8 percent (after adjusting for the impact of the US government settlement in 2017), to KD 31.3million in Q2. Revenue grew 9.5 percent to KD 97.5 million. For the first half of 2018, EBITDA grew by 20.1 percent and revenue by 14.8 percent. All entities in the group contributed to this performance.

Agility Industrial Real Estate continues to improve the efficiency of its operations in Kuwait. It also concluded its Phase I development in Riyadh of 80K sqm of warehousing capacity and started with Phase II, for which an additional 120K sqm will be delivered next year. Expansion in Africa is progressing according to plan as Agility Industrial Real Estate moves ahead with its development in Ghana and prepares to start new developments in Mozambique, Nigeria and Cote d’Ivoire. Tristar, continues to expand its fuels operation with existing customers. Tristar is also investing and diversifying its operations by expanding in shipping and broadening its geographic reach.

National Aviation Services (NAS) operations in Kuwait are generally stable. NAS operations in Cote d’Ivoire and Afghanistan continue to be positive contributors to the group. In addition, NAS’s new operation in Uganda has contributed significantly in 2018. Operations in Tanzania and Morocco continue to bear down on our group, but Tanzania is poised for a turnaround in 2018 and has numerous opportunities in the pipeline.