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KUWAIT CITY, May 16: Agility, a leading global logistics provider, today reported its first quarter 2021 earnings of 6.01 fils per share on net profit of KD 12.6 million , an increase of 28.7% over the same period in 2020. EBIT increased 31% to KD 26.9 million, and revenue increased 28.6% to KD 485.5 million.
Tarek Sultan, Agility Vice Chairman and CEO, said: “Agility started 2021 on a good note. Agility’s Global Integrated Logistics business performed well, with favorable market conditions as well as cost controls playing an important role. Agility’s Infrastructure companies overall are showing strong signs of recovery from the effects of the global pandemic. These Infrastructure businesses contributed an average of 80% of Agility’s EBIT over the past 5 years.”
Regarding Agility’s recent decision to sell its core commercial logistics business, Sultan said, “Going forward, Agility’s agreement with DSV Panalpina for DSV to acquire Agility’s Global Integrated Logistics business allows us to retain the assets generating the bulk of our operating profit, while taking advantage of the scale, experience, operational excellence and possibilities offered by working with DSV, one of the industry’s top performers. It also creates the flexibility and resources to reposition the company for its next chapter of growth.”
For Q1, the GIL numbers are fully consolidated on a line-by-line basis. However, going forward and until the deal closes, the consolidation will be done on a limited basis, as per IFRS 5, that accounts for non-current assets held for sale. GIL numbers will be summarized in the respective statement of the financial statements, rather than broken down on a line-by-line basis.
The Board of Directors also discussed and approved a forward looking minimum cash distribution policy recommendation of 20 fils per share and it might include treasury share buyback for the coming three (3) years.
The Board of Directors may at its sole discretion consider recommending additional forms of dividends and/or increasing the above mentioned guidance. As with all such recommendations, the distributions will be subject to the approval of the General Assembly of the Shareholders as well as the concerned authorities at the time of the distribution.
Agility Global Integrated Logistics (GIL)
In Q1, GIL achieved EBIT of KD 16.4 million, a 936.1% increase from same period a year earlier. The increase was driven by favorable market conditions in Freight Forwarding and growth in Contract logistics, along with strong cost controls.
GIL Net Revenue reached KD 77.2million,up16.2% from Q1 2020. The Net Revenue increase was a result ofan increase in Freight Forwarding and Contract Logistics Net Revenue. Air Freight Net Revenue increased as a result of higher volumes, yields and exceptional charter activity driven by current market situation. In Q1 2021, tonnage surged 14.8% over Q1 2020 levels.
The Ocean Freight Net Revenue increase was mainly a result of improved yields. Worldwide effective ocean capacity shrunk as volumes rebounded, particularly in Asia Pacific and Europe.
Q1 Contract Logistics growth came mainly from Asia Pacific (China, HongKong, Singapore) and MEA (Saudi Arabia, Dubai and Kuwait), where there was continued strong performance. Fairs & Events and Projects Logistics, both hurt by the pandemic, saw declines in Net Revenue.
Agility’s Infrastructure Companies
Agility’s Infrastructure group EBIT grew 2.2% to KD 24.7million for the first quarter of 2021.Infrastructure group gross revenuewas flat. Entities within the Infrastructure group are pursuing their growth strategies and have begun to recover from downturns caused by the pandemic.The Infrastructure group remains the main contributor to the group’s profitability.
Agility Logistics Park (ALP) revenue declined 10.2% in the first quarter due to the loss of revenue from Amghara land in Kuwait. This decrease was partially offset by an increase in revenue from Saudi operations. ALP continues to see strength in demand for warehousing space. Agility’s development strategy is to increase its land bank across the countries where it operates. ALP’sexpansion and development in Africa continues as planned. In the Middle East, Agility’s Logistics Park in Riyadh is almost fully developed; and in Kuwait, ALP is looking to optimize existing assets and will kick-off the Sabah Al Ahmed project development in July.
Tristar, a fully integrated liquid logistics company, posted almost a flat Q1 revenue. However, the company was able to record single-digitprofitability growth, mainly due to improved performance in its fuel business.Tristar’s long-standing relationships and repeat business with blue-chip clients have been key enablers of its success.