Agility Reports Earnings Increase of 7.3% for First Quarter 2019

Q1 2019
Reported
(Million KD)
Q1 2018
Reported
(Million KD)
Variance
(%)
Q1 2019
Excluding
IFRS16

(Million KD)
Q1 2018
Reported
(Million KD)
Variance
(%)
Revenue 378.8 371.8 1.9% 378.8 371.8 1.9%
Net Revenue 123.9 124.6 -0.6% 123.3 124.6 -1.1%
EBITDA 46.3 37.7 22.8% 39.3 37.7 4.1%
Net Profit 20.3 18.9 7.3% 20.8 18.9 10.2%
EPS (fils) 12.19 11.36 7.3% 12.52 11.36 10.2%

Figures in the table above have been rounded

Kuwait – May 12, 2019: Agility, a leading global logistics provider, today reported first quarter earnings of KD 20.3 million, or 12.2 fils per share,  an increase of 7.3% from Q1 2018 (Excluding IFRS-16 Impact it will be an increase of 10.2%).  First-quarter revenue was KD 378.8 million, and EBITDA was KD 46.3 million, increases of 1.9% and 22.8%, respectively.

Agility Consolidated Results

“Again a good start for Agility this year, though we are witnessing an environment where growth is slowing.   We have seen good improvement across the board, and are accelerating our efforts to achieve our targets. On a reported basis, EBITDA increased 22.8% and net profit improved 7.3%,” said Agility Vice Chairman and CEO Tarek Sultan.

Sultan said Agility’s core logistics business, Agility GIL, continues making significant and important investments in digital transformation that will position it for long-term success and differentiation in the market. He said Agility continues also to invest in its Infrastructure group companies, each of which is pursuing a growth strategy.

Agility Global Integrated Logistics

Excluding IFRS16 impact, Agility GIL reported Q1 EBITDA of KD 6.8 million, a 9% decrease compared to the same period a year earlier, the drop is attributable to costs associated with GIL’s digital transformation and commercial investments.

Agility GIL first-quarter revenue was KD 275 million, a decrease of 1.1% from KD 278.1 million in the same period a year earlier.  Q1 GIL revenue was affected by currency fluctuations. On a constant currency basis, GIL revenue increased 3.4% vs. the same period a year earlier. Net revenue increased to KD 65.4 million, a 1.2% increase over Q1 2018 (excluding the IFRS-16 impact). The net revenue increase was driven primarily by Ocean Freight and Contract Logistics, offsetting decreases in Project Logistics and Road Freight.  On a constant currency basis, GIL net revenue growth was 5.1%. GIL’s overall Q1 net revenue margin was 23.8% against a 23.3% a year earlier.

Air Freight tonnage grew 5.2% in Q1 2019; Air Freight grew across multiple trade lanes and sales channels with very strong performance from strategic customers.

Ocean Freight net revenue performance was driven primarily by yield improvement and TEU growth of 2.3%. GIL had stable Ocean Freight performance across geographies and sales channels with volume growth primarily from strategic accounts.

Q1 Contract Logistics performance was strong, with revenue growth of 3.6%. The Middle East/Africa region (mainly Kuwait, Dubai, Egypt) was the key driver of growth and improved margins.

GIL’s digital strategy involves the development of systems and technology that will improve productivity, differentiate its products, and position it as the industry’s leading innovator.  By accelerating its digital transformation, GIL will enhance customer and supplier connectivity, create innovative customer solutions, increase the efficiency of its business processes, and enable comprehensive business insight.

Agility’s Infrastructure Companies

The Infrastructure group reported EBITDA of KD 32.5 million (excluding IFRS 16 impact), an increase of 7.4% in Q1, on a revenue increase of 10.7%.  Agility is investing in these companies to drive its future growth.

Agility Logistics Parks (ALP) reported 23% revenue growth for the quarter, an increase that resulted from strong performance at new facilities completed in late 2018, as well as yield improvement at existing facilities. In Kuwait, ALP’s focus is driving the efficiency of existing assets and identifying new opportunities based on market demand. ALP expects to deliver 150K sqm of warehousing space this year, mainly in Saudi Arabia and Africa. It expects to begin construction of another 275K sqm of warehousing space to be delivered in 2020/21.  With respect to Africa, ALP is currently developing 68K sqm of new facilities in Ghana, Mozambique and Ivory Coast, with another 36k sqm opening in Nigeria at the end of the year and a planned further 100k sqm opening during 2020.

Tristar, a fully integrated liquid logistics company, posted 13.3% revenue growth in Q1, the main drivers for this growth are road transport and warehousing operations, in addition to the shipping business. Tristar continues to grow its business with existing customers as well as expand its customer and geographical reach. In the first quarter, Tristar signed a five-year charter contract with Shell – with five optional years – to deliver six medium-range products tankers by 2020.

National Aviation Services (NAS), the fastest growing aviation services provider in the emerging markets, grew revenue 3.5% in the first quarter of 2019. NAS continues on its strategic road map to expand and be the leader in Africa.

NAS Cote d’Ivoire delivered double-digit growth; Egypt improved significantly with the launch of a new lounge in Cairo; and Tanzania and Morocco are delivering on their turn-around plans. NAS Uganda is slightly below projections due to a decrease in UN business and commercial flights but is expected to rebound.

At United Projects for Aviation Services Company (UPAC), a leading real estate and facilities management company operating in Kuwait, revenue declined 9.2%, primarily due to the shift of some airline traffic to dedicated terminals, along with a reduction in the number of flights operating out of Sheikh Saad Terminal.

In February 2019, UPAC formally started operations in Terminal 4 (T4), the new dedicated Kuwait Airways terminal. UPAC has a new five-year contract to manage the car parks and related facilities in T4. In Abu Dhabi, construction continues to progress steadily on Reem Mall, the $1.2 billion project set to become the new retail and leisure attraction in the emirate. Reem Mall is scheduled to open in late 2020. UPAC continues to optimize its existing real estate management platform in Kuwait and expand its presence in Kuwait and the region.

GCS, Agility’s customs modernization company, posted revenue growth of 6.8%, driven by increased trade activity in Kuwait. GCS also added new services and continues implementing initiatives to drive efficiency and improve profitability.

Reported Financial Performance for the first quarter of 2019 (including IFRS 16 impact)

  • Agility’s net profit reached KD 20.3 million, a 7.3% increase from KD 18.9 million in 2018. EPS was 12.2 fils, compared with 11.4 fils a year earlier.
  • EBITDA was KD 46.3 million, a 22.8% increase from Q1 2018.
  • Agility’s revenue for Q1 2019 wasKD 378.8 million, an increase of 1.9% from KD 371.8 million in Q1 2018. Net revenue decreased by 0.6%.
  • GIL’s revenue was KD 275 million, a 1.1% decrease from Q1 2018 (On a constant currency it’s an increase of 3.4%).
  • Infrastructure group revenue was KD 103.8 million compared with KD 93.7 million in Q1 2018, a 10.7% increase.
  • Agility enjoys a healthy balance sheet with KD 1,985.7 million in assets. Its net debt position excluding IFRS 16 impact was KD 121.2 million as of March 31, 2019. Operating cash flow was KD 45.2 million for the first quarter of 2019, an increase of 54.6%.

Closing

“We have a clear and consistent strategy that is translating into year-on-year improvements. We are also off to a good start in 2019. Agility is going to substantially invest in business transformation to drive operational excellence for the future,” Sultan said.