Agility Logistics achieved in the first half of the year EBITDA of KD 28.8 million, an increase of 1.3% compared to the same period in 2019. This growth is due to strong results achieved by warehousing and logistics services for projects and air freight services, as well as , On a strong focus on cost containment.
Net revenues amounted to 135.8 million Kuwaiti dinars, in line with the levels of the first half of last year. The warehousing and logistics services for projects and air freight services witnessed an increase in net revenues, while the sea freight and exhibitions and events logistics services declined. Agility Logistics also achieved total revenues of KWD 570.6 million, an increase of 2.5% over the same period in 2019.
Air and sea freight volumes decreased in the first half of the year by 23.6% for air freight and 14.8% for sea freight due to Covid 19 and its repercussions on demand due to closures, production stoppages and economic downturn across different industries and multiple geographic regions. However, in the first half, air cargo services saw an increase in revenue due to reduced cargo capacity and high demand for urgent shipments of PPE and other medical equipment. Therefore, net air freight revenue for the first half increased by 17% compared to the same period of the previous year, while net ocean freight revenue decreased by 16% compared to the same period in 2019.
Third-party warehousing services also achieved healthy growth with an increase of 7% in net revenues, especially in the Middle East and Africa (Kuwait, Saudi Arabia) as a result of adding new facilities and increasing operational efficiency. Project logistics services also showed strong performance in all regions and achieved an increase in net revenues of 25%, driven by new projects and an increase in the volume of business with existing clients. However, net revenue for exhibitions and events logistics decreased by 46% due to the cancellation and postponement of major events around the world.
As of the first quarter, Agility Integrated Global Logistics has implemented a set of temporary and permanent cost-cutting measures in response to the repercussions of the pandemic, with the aim of ensuring the continuity of strong profitability during periods of downturn and global business volatility. Logistics continues to focus on operational productivity and providing flexible solutions for customers to respond to the changing market environment.
Infrastructure Agility Group
The profits of the Agility Infrastructure Group companies before interest, taxes, depreciation and amortization decreased by 18% to reach 56 million Kuwaiti dinars in the first half of 2020. This decline is mainly due to the decline in the performance of UPAC, Nass and Global Clearinghouse Systems, which witnessed a significant decline in its operations as a result To the epidemic. In contrast, Agility Clusters of Logistics and Triestar have demonstrated their resilience in the face of the repercussions of the epidemic during the first half of the year. The Infrastructure Group net revenue decreased by 8.4% and revenue by 10.2%.
Agility Logistics Clusters revenue grew 4.5% in the first half of the year amid increased demand for storage space, especially from suppliers of medical equipment and foodstuffs, as well as strong demand from e-commerce companies as the logistics complexes were strategically positioned to support these companies to meet the demands of Their clients. Agility Logistics Park has expedited the delivery of some of its projects to meet increased customer demand. Development work in Kuwait, Saudi Arabia and Africa continues as planned, despite some delays due to closures.
TriStar, a company specializing in providing integrated logistics services to the oil products sector, witnessed a 10% decline in revenues in the first six months of the year, but the company’s business model helped it withstand during this crisis as profits witnessed double-digit growth during the same period. The main reason for the decline in revenues is the sharp drop in fuel prices and the slowdown in the volume of work due to the Covid 19 pandemic, which in turn affected the fuel, road transport and storage sectors. However, marine services have shown healthy growth due to the entry of new ships into service and strong market demand. With the beginning of the Coronavirus outbreak, TriStar has taken all measures to ensure that business is not interrupted or the provision of services to its customers is not disrupted. Despite the continuing uncertainty in the market, we believe that the strong resilience demonstrated by the company in the first half of the year will enable it to achieve success in the second half of 2020. TriStar continues to implement its plans and search for opportunities to add value to its shareholders.
National Aviation Services (NAS) reported a 29% decline in revenue, despite good performance in January and February of this year. However, Nas’ revenues came under great pressure, starting in March, when airlines and airports in which the company operates reduced flights while reducing related services and, in some cases, halting them completely. Despite limited operations at many airports, NAS continued to provide services related to evacuation flights, private aircraft and cargo freight. With the resumption of airport and aviation activity in some locations, people are currently witnessing an increase in demand for their services. Nass’s focus during the remainder of 2020 will be on managing cash flow, cutting costs in line with the aviation industry’s forecast for the next two years, pursuing new growth opportunities, and adjusting policies and procedures to operate in the post-Covid-19 world.
The pandemic also affected the business of the United Projects for Air Services Company (UPAC), which in turn witnessed a 51.8% decline in revenues in the first half of the year due to the suspension of operations at Kuwait International Airport. UPAC has responded to this by activating a contingency plan for its operations and has taken steps to minimize the negative impact on its business.
As for Global Clearinghouse Systems – which specializes in modernizing customs operations – it witnessed a 21% decline in revenues due to the implementation of the precautionary measures taken by the Kuwaiti government in response to the Covid 19 virus, as some border areas were temporarily closed starting from March, which led to a reduction in the volume of trade. And it caused the company’s revenue to drop.
In this regard, Sultan commented: “All our companies in all fields have activated their business continuity and cost management plans. Even during these difficult times, they all have contributed to related social responsibility activities that include delivering food to families in Kuwait, supporting the initiatives of the Kuwait Red Crescent Society, and providing services. Free local storage and transportation as part of support for the COVID-19 response efforts. In Mozambique, we also transported PPE to 7 hospitals and arranged for their storage in our newly built logistics complex. ”
Financial data for the first half of 2020
• The company recorded a net profit of 16.2 million Kuwaiti dinars in the first half of 2020, down 61.3%. Earnings per share amounted to 8.47 fils per share, compared to 21.89 fils per share in the first half of last year.
• Profits before interest, taxes, depreciation and amortization amounted to KD 75.8 million, down 20.1%.
• Agility’s revenue reached KWD 765 million, down 1.3%, while net revenue decreased by 3.7% in the first half of the year.
• Integrated global logistics services revenues amounted to KD 570.6 million, an increase of 2.5% over the first half of 2019.
• Infrastructure group revenues amounted to 202.8 million Kuwaiti dinars, down 10.2%.
• Agility has a healthy budget, with assets of KWD 2.2 billion, net debt of KWD 143.1 million as of June 30, 2020, and cash flows from operations of KWD 93.6 million in the first half of 2020, an increase of 128.2%.
Sultan added, “The full impact of the repercussions of Covid 19 is not yet clear, as there are many potential scenarios and many unknown things, but we are taking steps to overcome these circumstances and get out of them stronger. We adapt to reality according to the data of each of our companies,” We are working to bring the cost structure in line with the new levels of business. We also have a strong focus on cash management, with the aim of providing the required liquidity in the near future. ”
Sultan concluded, “We feel that our long-term vision of developing infrastructure companies in emerging markets, enabling digital logistics, and expanding into new sectors such as e-commerce is becoming more important than ever. We would like to thank our employees, customers and shareholders for their support throughout This difficult period is confident that together we will be able to recover stronger and better. ”
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Agility is a global logistics company with an estimated annual revenue of $ 5.2 billion and more than 26,000 employees in 100 countries. Agility is one of the world’s largest freight forwarding and warehousing service providers and a pioneer and investor in modern technologies to enhance supply chain efficiency. Agility is also a pioneer in emerging markets and one of the largest private sector owners and developers of warehousing and industrial complexes in the Middle East, Africa and Asia. Also, Agility subsidiaries provide a range of services that include fuel logistics, airport services, facility management, commercial real estate, customs digitization, and infrastructure services for remote locations.
For more information, please visit our website www.agility.com
© Press Release 2020