publish time

11/05/2017

author name Arab Times

publish time

11/05/2017

KUWAIT CITY, May 10: Agility, a leading global logistics provider, today reported earnings of 12.7 fils per share on net profit of KD 14.6 million, an increase of 11.4% over the same period in 2016.Agility reported EBITDA of KD 30.8 million, a 17.4% increase, along with revenue of KD 320.5 million, a 7.3% increase over Q1 2016. The results represent the fifth consecutive quarter of double-digit growth in Agility’s EBITDA, in line with the company’s long-term guidance.“Our performance has been driven by strong growth in our Infrastructure companies in emerging markets and by the steady progress we have made in improving the underlying fundamentals of our commercial logistics business,” said Tarek Sultan, Agility Vice Chairman and CEO. “We remain on track to achieve our target of $800 million in EBITDA by 2020.”Agility Global Integrated Logistics (GIL)Revenue for Agility Global Integrated Logistics (GIL), the company’s core logistics business, grew 6.5% in Q1, to KD 240.3 million. Revenue growth was driven by all products. Air freight volume grew 16% and ocean freight volume grew 12.5% this quarter, both outpacing the market average.GIL net revenue grew 2% in Q1, increasing in most products and showing a 9% increase in contract logistics over the same period a year earlier. Net revenue margins, 26% in Q1 2016, declined to 25%, mainly because of pressure on rates and tightening capacity on major trade lanes.GIL EBITDA fell by 12% (7.4% on a constant currency basis) for the quarter, despite revenue and net revenue growth. GIL’s Q1 EBITDA margins were 2.4% vs. 2.9% in Q1 2016. EBITDA decreased because of increased currency fluctuations; ongoing investments in technology development; and increased investment in solutions and growth opportunities in its core markets and verticals.“GIL is winning new business and containing its costs by driving productivity increases. We believe our strategic focus on trade lanes, solutions and sales excellence will lead to continued growth in freight forwarding volumes this year,” Sultan said.GIL is investing in profitable and growing contract logistics businesses. New facilities are coming online in the Middle East and Singapore over the course of 2017. GIL is also investing in transforming its business through technology and further strengthening its online solutions for customers.Agility’s Infrastructure Companies Agility Infrastructure group EBITDA rose 24.1%, to KD 27.4 million, on revenue growth of 8.6%. Agility Real Estate and Tristar are the main drivers behind the growth.Agility Real Estate, the largest contributor in the group, increased revenue by 10.8% in Q1. Agility Real Estate is the largest private owner of industrial real estate in the Middle East and Africa, where it is developing new facilities. In Kuwait, Agility is developing more than 900,000 sqm of warehousing over the next three years.Tristar is a fully integrated liquid logistics company serving the downstream oil and gas industry with surface transport, ocean shipping, dangerous goods warehousing, fuel farm management and other services. Tristar reported healthy growth in this quarter, driven by new shipping business complimented by its recent E-ships acquisition. Tristar is focused on diversifying its customer base and expanding its shipping business while increasing its productivity.National Aviation Services (NAS) has become one of the largest ground handling and airport services companies in emerging markets. With a leading position in Africa, NAS will continue to focus primarily on the continent for growth. NAS’s Q1 revenue growth was driven by its Cote D’Ivoire operations, which saw double-digit increases in flight volumes. NAS is also launching operations in Morocco and working on improving yields in its Kuwait business.UPAC, a publically-listed commercial real estate company, announced earnings of KD 2.2 million, a 14.5% increase over the same period in 2016. UPAC revenue increased 7.4% to KD 3.5 million. UPAC continues to improve its managed projects at the Kuwait airport and Discovery Mall, increasing footfall and demand for space, and achieving 100% utilization. The Reem mega-mall in Abu Dhabi, a planned retail, entertainment, and dining destination of more than 2 million square feet, is key to UPAC’s future growth and development.Recap of Agility Q1 Financial Performance* Agility’s net profit increased 11.1% to KD 14.6 million in Q1 2017. EPS was 12.7 fils vs.11.4 fils a year earlier.* EBITDA increased 17.4% to KD 30.8 million.* Q1 revenue rose 7.3%, to KD 320.5 million and net revenue increased by 8.6%.* GIL EBITDA fell 12% (7.4% on a constant currency) while its revenue grew 6.5%.* Infrastructure’s revenue grew 8.6% to KD 81.8 million, compared with Q1 2016.* Agility enjoys a healthy balance sheet with KD 1.6 billion in assets. Net debt position was KD 56.4 million as of March 31, 2017. Operating cash flow was KD 24.3 million for the first quarter of 2017, which represents 78.9% of EBITDA.SummaryAgility is entering an investment and growth phase and expects: * EBITDA: double-digit growth* Net profit: growth at a slower rate than EBITDA due to interest expense and minority interest* Free cash flow: limited due to capex program* Debt: move to net debt position from the net cash position maintained over the past six years. Debt ring-fenced at the operating level with limited parent recourse and guarantee.