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Agility posts KD 53 mln net profit for 2015 – Board proposes dividend distribution of 30 fils per share, plans buy-back

KUWAIT CITY, March 27: Agility announced its 2015 financial results, reporting a net profit of KD 53 million, or 46.41 fils per share, an increase of 5% over the same period in 2014. Revenue for the year stood at KD 1.3 billion. EBITDA stood at KD 100 million.

For fourth quarter 2015, Agility reported a net profit of KD 14 million with an earnings-per-share of 12.44 fils, an increase of 5% over the same period in 2014. Revenue for the quarter stood at KD 322 million and EBITDA at KD 27 million.

Board of Directors Recommendation

The Agility Board of Directors has proposed a dividends distribution of 30% (30 fils per share) for the fiscal year 2015, subject to the approval of the Annual General Meeting. The Board also announced that Agility will pursue a treasury share buyback “program” to repurchase up to 10% of its share capital, in compliance with the rules and the regulations set forth by the CMA and other relevant regulatory authorities.

The Agility Board authorized repurchases, from time to time, at a price the Board believes to be well below the intrinsic value of the company.  Agility CEO Tarek Sultan said: “Shareholders’ returns are not limited to dividends. They also can be enhanced through the acquisition of shares by the company.  The decision to pursue a buyback program demonstrates our belief that the true  value of the company is greater than the current market value and that repurchased shares will be accretive to remaining shareholders.”

The buyback program will entail various mechanisms, such as a tender offer or purchases through the open market.  The company will make the announcement of the price and the size of the share buyback at the time of the offer.

Agility Consolidated Results

Sultan said: “Agility made good progress in 2015 but still has a demanding road ahead to make it the leading company we all desire. In 2015, we were able to generate KD 105 million cash from operations, a 68% improvement from last year. We improved our free cash flow by KD 6 million to reach KD 31 million in 2015, despite challenging economic times. Our longer-term target is to reach an EBITDA of USD 800 million by 2020.  Our efforts to define a clearer strategy and improve execution are paying off in stronger customer relationships, an expanding emerging market footprint, a sharper focus, and a more disciplined management approach.”

Agility’s Global Integrated Logistics (GIL)

GIL revenue for 2015 was KD 997 million, a 6% decline from 2014. Revenue was affected by challenging and volatile market conditions and by exposure to currency fluctuations.  On a constant currency basis, revenue declined by 2%.

GIL net revenue on a constant currency basis improved by 3%, and margins expanded to 25% in 2015 from 23% in 2014. The improvement resulted from continued growth in contract logistics and better performance within the freight forwarding business, particularly ocean freight.  Air freight volumes softened towards the end of 2015, but ocean freight volumes and yields improved, driven by better commercial discipline.

“GIL’s roadmap remains the same.  Its aim is to improve operational performance through technology-driven transformation, stronger commercial performance and better efficiency,” Sultan said. “GIL’s strategy and improved execution are paying off. The challenge is to further accelerate improvement to deliver results.”

Agility’s Infrastructure Group

For 2015, revenue for Agility’s Infrastructure Group increased 4% to KD 314 million, when compared with 2014.

Revenue for Agility’s Real Estate business grew 9% from 2014. Agility maintains a strong real estate platform in Kuwait, but is also actively developing holdings in other Gulf countries and Africa.

“Agility has made significant investments in the Infrastructure companies over the last two years in order to ensure the foundation for future growth. We continue to believe in the long-term opportunities that the Infrastructure companies have to tap into niche segments in emerging markets,” Sultan said.

Agility’s Real Estate business expects to open its first logistics and distribution park in Accra, Ghana shortly. National Aviation Services, Agility’s aviation services company, recently secured a contract to provide services in Abidjan, Ivory Coast. UPAC, which specializes in real estate development and facilities management, has entered into a partnership to develop the Reem Mall on Abu Dhabi’s Reem Island.

Financial Performance for 2015

* Agility’s net profit stood at KD 53 million, a 5% increase from KD 51 million in 2014. EPS was 46.41 fils, compared with 44.19 fils a year earlier.

* EBITDA stood at KD 100 million, virtually flat from 2014.

* Agility’s revenue for 2015 stood at KD 1.3 billion, a decrease of 4% from KD 1.4 billion in 2014.  Net revenue increased 4% from 2014.

* GIL’s revenue stood at KD 997 million, a 2% decrease from 2014 if adjusted for currency impact.

* Infrastructure’s revenue was KD 314 million compared with KD 303 million in 2014, a 4% increase from 2014.

* Agility enjoys a healthy balance sheet with a net cash position of KD 33 million as of Dec. 31, 2015 (KD 60 million in 2014) and free cash flow of KD 31 million for full year 2015 (KD 25 million in 2014).

Closing

“For 2016, we see a mixed picture clouded by slower growth in emerging markets, ongoing sluggishness in the Eurozone, geopolitical instability in various parts of the world, and the continuation of low oil prices. Given those conditions, we know we have to stay focused and disciplined,” Sultan said. “But in the medium to longer term, we believe in our ability to grow our market share and footprint in emerging markets to serve growing consumer demand.  I am confident in our strategy and our ability to meet our 2020 EBITDA target of $800 million.”

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