Agility revenue up 8.1% in quarter ending June 2019
August 15, 2019: Global logistics company Agility has reported second-quarter 2019 (Q2, April to June 2019) earnings of 12.99 fils per share on net profit of KD21.6 million.
August 15, 2019: Global logistics company Agility has reported second-quarter 2019 (Q2, April to June 2019) earnings of 12.99 fils per share on net profit of KD21.6 million, an increase of 8.1 percent over the same period in 2018. EBITDA (earnings before interest, tax, depreciation and amortisation) grew 31.2 percent to KD48.6 million, and revenue increased 3.2 percent to KD396.3 million.
Global Integrated Logistics (GIL) achieved EBITDA growth of 7 percent (excluding IFRS 16 impact) despite higher operating expenses related to new facilities and higher staff costs for operations and commercial requirements. GIL’s Q2 reported EBITDA was KD15.9 million, or KD10 million excluding IFRS 16 compared to KD9.3 million in Q2 2018.
GIL Q2 gross revenue fell 2.6 percent to KD281.9 million, mainly due to currency fluctuations. On a constant-currency basis, GIL revenue grew 1 percent. Net revenue increased 4 percent to KD69.4 million, mainly as a result of better ocean freight and contract logistics performance.
Tarek Sultan, vice chairman and CEO, Agility said, “We had a good Q2 despite the tough environment we operate in. GIL reported very good results and continues to implement its strategy to drive operational efficiency. Agility’s Infrastructure companies performed well, and key initiatives in each business unit are moving ahead according to plan.”
GIL Air Freight net revenue decreased 1.8 percent as the result of lower job volume and tonnage, although the decrease was offset in part by higher yields. Q2 2019 tonnage fell 8 percent compared to Q2 2018. The decrease was attributed to weak market conditions and lower demand across industries and geographies, along with a return to more normal volumes following a spike in high-volume shipments a year earlier. US-China tariffs and import restrictions have been pointed out as reasons for air freight market volume declines and shifts.
Yield improvement drove strong ocean freight performance, despite a 2 percent drop in TEUs. Ocean freight performance was strongest in the Americas and Asia Pacific.
Contract logistics growth continued in Q2 with gross revenue of KD32.8 million, a 1 percent increase from the same period in 2018. The Middle East-Africa region, notably the Kuwait and Egypt markets, was the key driver of growth and improved margins.
GIL is focusing on accelerating the roll-out of its global operating platform, as part of a broader digital transformation strategy that is intended to drive improved customer experience, more effective supplier management, enhanced business efficiency and productivity, and better data for decision-making.
Agility Logistics Parks (ALP) reported 15 percent revenue growth for the quarter. Revenue from facilities completed in late 2018 contributed to this growth, as did yield improvement at existing facilities.
In Kuwait, ALP is looking to develop new facilities that optimise the use of its existing land bank. In Saudi Arabia, ALP has completed the development of two of the three warehouses it is building in 2019, each with 40,000 square metre capacity. ALP Saudi Arabia is now moving ahead with the development of the third warehouse. In Africa, ALP projects are progressing well. New warehousing space at the ALP in Ghana will be delivered soon. More space in other locations will be added towards the end of 2019.
Tristar, a fully integrated liquid logistics company, posted 23.2 percent revenue growth in the second quarter, driven by increases in road transport and warehousing operations from new contract wins from new and existing customers, in addition to the shipping business. Tristar continues to execute and to look for opportunities to unlock additional value for its shareholders.
National Aviation Services (NAS) grew revenue 1.6 percent in the second quarter. NAS’s performance this quarter was affected by airspace closures and a decrease in commercial flights in some countries where it operates. However, NAS anticipates a rebound towards the end of the year.
At United Projects for Aviation Services Company (UPAC), a leading real estate and facilities management company operating in Kuwait, revenue fell 2.3 percent in the second quarter. The decline was largely the result of a shift in passenger traffic to dedicated airline terminals, along with a reduction in the number of flights operating out of Sheikh Saad Terminal.
Earlier this year, UPAC began car park management operations in (T4), the newly dedicated Kuwait Airways terminal. In Abu Dhabi, construction continues to progress on Reem Mall, the $1.2 billion project set to become the new retail and leisure attraction in the Emirate. Reem Mall is scheduled to open in late 2020. UPAC continues to optimise its existing real estate management platform in Kuwait and work to expand its presence there and elsewhere in the region.
GCS, Agility’s customs modernisation company, posted revenue growth of 12 percent, driven by increased trade activity in Kuwait, in addition to new service offerings. GCS continues implementing initiatives to drive efficiency and improve profitability.