| Q2 2017
H1 2018 (MillionKD)
|| 18 %
Dubai, UAE, August 06, 2018: Agility, a leading global logistics provider, today reported second-quarter earnings of 13.8 fils per share on net profit of KD 20 million, an increase of 18.7% over the same period in 2017. Agility EBITDA grew 13.6% to KD 37.1 million. Revenue increased 12.3% to KD 384.2 million.
First-half earnings of 26.9 fils per share and net profit of KD 38.9 million were up 24%. First-half EBITDA was KD 74.8 million, an increase of 18%. Revenue for the first half was KD 756 million, an increase of 14.1%.
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.”
Agility Global Integrated Logistics (GIL)
Global Integrated Logistics (GIL) business strategy of effective trade lanes development, productivity optimization and defined tailor-made solutions to customers continued to generate favourable results. GIL gross revenue grew 13.4% to KD 289.3 million. Net revenue rose 5% 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% to KD 567.4 million and 6.4% to KD 131.3 million.
Air freight continued its strong performance in Q2, driven by solid volume growth of 14% and stable yields compared to the same period of last year. Air freight net revenue grew 21.9% in Q2 and 20.3% in the first half. Ocean freight had consistent volume growth but with lower yields. In Q2, container volume increased 8.2% vs. Q2 2017. Ocean freight net revenue grew 7.4% in Q2 and 7.3% in the first half.
Regionally, Air freight and Ocean freight performance was strongest in the 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% in Q2 and 4.5% in the first half.
GIL's net revenue margin was 23% in Q2, down from 24.9% 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%, slightly lower than 3.6% in Q2 2017. In the first half, EBITDA grew 13.3% to KD 16.8 million. EBITDA margin in the first half remained flat at 3% 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% (after adjusting for the impact of the US government settlement in 2017), to KD 31.3 million in Q2. Revenue grew 9.5% to KD 97.5 million. For the first half of 2018, EBITDA grew by 20.1% and revenue by 14.8%. 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.
GCS, a company specialized in digitizing customs, showed improved performance in the second quarter. GCS manages all customs’ activities at ports of Kuwait and aims to enhance customs modernization through its services.
UPAC revenue and profits increased during the second quarter. Operations at Kuwait Airport and other prominent locations in Kuwait continue to drive growth. In addition, construction of Reem Mall in Abu Dhabi is moving forward according to plan.
Recap of Agility Q2 Financial Performance
- Agility’s net profit increased 18.7% to KD 20 million in Q2 2018. EPS was 13.8 fils vs.11.6 fils a year earlier.
- Agility’s Q2 EBITDA increased 13.6% to KD 37.1 million.
- Agility’s Q2 revenue rose 12.3%, to KD 384.2 million and net revenue increased by 5.5%.
- GIL Q2 revenue grew by 13.4% to KD 289.3 million.
- Infrastructure’s Q2 revenue grew 9.5% to KD 97.5 million.
- Agility enjoys a healthy balance sheet with KD 1.7 billion in assets. Net debt position was KD 130.7 million as of June 30, 2018. Operating cash flow was KD 29.2 million for the first half of 2018.