Global logistics provider Agility (DFM: AGLTY) reported a 20 percent increase in net profit for the second quarter of 2019. However, the company reported a more modest rise in revenues.
Sulaibiya, Kuwait-headquartered Agility has a range of businesses in air, ocean and road freight, logistics parks, contract logistics and specialized logistics. It operates in a range of sectors including automotive, chemicals, consumer goods, energy, fashion, industrial and many more.
Agility announced revenues of 396.3 million Kuwaiti Dinar (KD) for the second quarter of 2019 (equivalent to US$1.302 billion; KD1 = US$3.28), a rise of 3.2 percent over the same period last year. Earnings before interest, tax, depreciation and amortization (EBITDA) stood at KD48.6 million (about US$160 million), up by 31.2 percent on the prior corresponding period. Net profit for the second quarter of 2019 was KD21.6 million (about US$71 million), up by 8.1 percent on the second quarter in 2018.
On a half-year basis, Agility reported KD 775.0 million in 2019, up by 2.5 percent on the first half of 2018. EBITDA for the first half of this year was KD 94.0 million, up 27.0 percent on the prior corresponding period, and net profit was KD 38.9 million, up 7.7 percent compared to the first half of 2018.
Tarek Sultan, Agility Vice Chairman and CEO, said: “We had a good second quarter despite the tough environment we operate in. GIL [Agility Global Logistics] 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.”
Agility Global Integrated Logistics
The group counts several freight business in this division, which recorded a 2.6 decrease in gross revenues to KD 281.9 million, “mainly due to currency fluctuations,” the group said. EBITDA of KD15.9 million was recorded in the second quarter of 2019.
The group noted that the air freight market has been under pressure and that its air freight net revenue fell by 1.8 percent due to a lower job volume and tonnage. The drop in goods shipped was the result of a “weak” market along with lower demand in various markets and geographies. The groups also noted that the market had been affected by U.S.-China tariffs.
It was a different story in ocean freight, however. The company described performance as “strong,” driven primarily by yield improvement despite a 2 percent drop in ocean shipping container volumes as measured in twenty foot equivalent units. “Ocean freight performance was strongest in the Americas and Asia Pacific,” Agility said.
Contract logistics revenues rose in the second quarter by 1 percent, compared to the same period a year earlier, to KD 32.8 million on the back of the Kuwaiti and Egyptian markets.
Agility Infrastructure
The group’s infrastructure business grew its revenues by 15 percent and its EBITDA by 14.7 percent in the first half of 2019, Agility said, noting that “all entities” in its infrastructure business contributed to the results.
Revenues from logistics parks grew by 15 percent driven, in part, by contribution from facilities completed late last year. The company added that it completed development at two of three warehouses in Saudi Arabia and expects new warehousing space to be delivered “soon” in Ghana. Meanwhile, Tristar (a subsidiary integrated liquid logistics company) posted 23.2 percent revenue growth in the second quarter due to increases in road transport and warehousing. This, in turn, was driven by new contracts from new and existing customers.
Agility reports US$5.1 billion of annual revenues and employs about 26,000 people in more than 100 countries. Its warehousing operation owns 20 million square meters of land and operates over three million square meters of logistics facilities. It has an extensive road freight business with truckload and less-than-truckload services to many destinations around the world.