Numbers above are rounded
KUWAIT – March 26, 2022 – Agility, a leader in supply chain services, infrastructure, and innovation, today reported full-year 2021 earnings of 464.36 fils per share on net profit of KD 977.4 million, an increase of 2,250% over the same period in 2020. EBITDA increased 13.2% to KD 109 million, and revenue grew 22.1% to KD 486.2 million.
Agility’s Sale of GIL to DSV
In 2021, Agility sold its core commercial logistics business, Global Integrated Logistics (GIL), to DSV, the world’s third-largest freight and logistics provider, in exchange for 19.3 million shares in DSV. As a result Agility reported a one-time gain of almost KD 1 billion and is now the second-largest shareholder in DSV with an 8% stake.
Moving forward, Agility’s business profile can be divided into two segments: controlled and non-controlled businesses.
- Controlled: Agility continues to own and operate the businesses that have historically generated 80% of company profits; these businesses are “controlled” by Agility. Of these, the five most financially material companies are Agility Logistics Parks, Tristar, National Aviation Services, UPAC, and Global Clearinghouse Systems.
- Non-Controlled: In addition, Agility holds minority stakes in businesses through its investments in both established sectors and ventures in freight, real estate, e-commerce enablement, ESG technology and other digital technologies. Agility’s stake in DSV represents the largest of those investments. These are “non-controlled” businesses. The collective value of these investments today represents 57% of the company’s assets.
2021 in Review
Agility Vice Chairman Tarek Sultan said: “Agility’s 2021 performance was exceptional. In addition to a significant one-time gain from the GIL sale, our portfolio of businesses performed well, returning to pre-COVID profitability levels. We will be looking to accelerate growth in these businesses as they contribute to our core operations and EBITDA.”
Sultan said: “The DSV transaction and the sale of GIL fundamentally changed the structure of the company and reset the baseline for the continuing operations. Like most companies, Agility was adversely affected by the COVID pandemic in 2020 and 2021.Looking ahead, despite the challenging market conditions and geopolitical risks, we expect performance of our continuing operations to be strong, and expect our operating results for 2022 to show a minimum of 20% growth compared to this year. The board and the executive management team of the company continue to be focused on growing and enhancing shareholder value over time, and we are confident that with current M&A initiatives, as well as the different, organic and inorganic growth initiatives that we are working on across the controlled segment entities, we will continue to create value for shareholders in the medium and long term.”
Commenting on the company’s investments, Sultan said: “Today, we own roughly 8% of DSV, the world’s third-largest freight forwarder. This investment represents a large portion of our balance sheet, and we continue to like the fundamentals of this sector as we believe it will grow.”
He also noted that Agility’s debt-levels were expected to increase in line with business growth needs, but that the company “intends to keep borrowing within prudent limits.”
“Our focus is growth. Agility is a long-term, multi-business operator and investor aiming to create value for our stakeholders with a disciplined investment strategy that focuses on companies in high-growth sectors with strong fundamentals, reinforced by management teams with strong records, best-practices governance, and alignment with the shareholders,” Sultan said. “We enter 2022 with confidence. We have a successful record of growing and scaling businesses sustainably and responsibly. We have shown that we know how to create and unlock value for our shareholders, customers, employees, and communities. We believe our best days lie ahead.”
The Board of Directors announced a plan to distribute cash dividends of a minimum of 20 fils per share for 2021, 2022 and 2023, starting with distribution in 2022. For 2021, the board has recommended a cash dividend distribution of 20 fils per share in addition to a 20% bonus shares (20 shares for every 100 shares). The cash and stock dividends are subject to approval by the General Assembly.
Agility Controlled Businesses
Agility Logistics Parks (ALP) revenue in 2021 was roughly in line with 2020 results, which benefitted from increased demand for warehousing facilities as companies and government entities continued to store more goods in the face of ongoing supply chain disruption. Demand for warehousing space continues to grow in the MEA and South Asia regions where ALP operates. ALP is optimizing its existing land bank and adding to its supply of available land to meet customer demand. In 2021, ALP added roughly 150k sqm of built-up storage area. Operations in Kuwait, Saudi Arabia and Africa have performed well, and ALP is looking at new markets for additional growth.
Tristar, a fully integrated liquid logistics company, posted a 16.5% increase in revenue for the full-year 2021 vs. 2020. Profitability more than doubled and was in line with forecasts. This performance is driven by strong recovery in international oil prices, good performance in the Road and Transport segments, and favorable dry bulk charter rates in the Maritime segment. Tristar expects another year of growth in 2022.
National Aviation Services (NAS) reported 65.4% revenue growth year-over-year for 2021. The increase reflects the broad recovery in commercial aviation as flights, passengers and cargo volumes grew. In addition, NAS undertook cost-cutting measures that had a positive impact on overall performance, and added new operations in the Democratic Republic of Congo, South Africa, Iraq (Baghdad) and Kenya. NAS’s performance also benefitted from its launch of technology solutions and applications intended to support governments and passengers by enhancing travel health and safety. In 2022, NAS and Agility publically reported that they are in discussions for the potential acquisition of John Menzies, one of the world’s largest providers of aviation services.
United Projects for Aviation Services Company (UPAC) reported a 14% increase in revenue for 2021. The increase was driven by a rebound in airport-related services and parking, following the phased reopening of Kuwait International Airport in Q3. UPAC expects a gradual increase in airport traffic in 2022 and beyond, and a favourable outlook for its business.
UPAC is a co-developer of Abu Dhabi’s Reem Mall, on Reem Island. Construction is more than 95% complete. The retail, entertainment and leisure attraction is expected to open in 2022. Carrefour, the anchor tenant, recently opened its doors at Reem Mall.
At Global Clearinghouse Systems (GCS), Agility’s customs-modernization company, FY 2021 revenue grew 32.1%. The increase was driven by higher trade volumes and company growth initiatives. GCS is pursuing opportunities to sustain future growth and diversify its sources of income.
Investments in Non-Controlled Businesses
Agility’s holds minority stakes in a number of businesses both listed and non-listed. The largest investment in this portfolio is DSV, which is listed on the NASDAQ Copenhagen. The other investments in the portfolio span a number of sectors including: freight, real estate, e-commerce enablement, ESG and supply chain technologies. The book value of non-controlled investments was KD 1.9 billion at the end of 2021.
Agility takes stakes in companies and assets in high-growth industries in order to create value for its shareholders and expose Agility companies to innovative technologies and companies that can help them future-proof their own businesses.
Recap of Agility FY 2021 Financial Performance
- Agility’s Net Profit increased 2,250.7% to KD 977.4 million from KD 41.6 million a year earlier.
- Agility’s EBITDA increased 13.2% to KD 109 million.
- Agility’s Revenue increased 22.1%, to KD 486.2 million and Net Revenue increased by 17.6%.
- Agility enjoys a healthy balance sheet with KD 2.9 billion in assets including KD 1.4 billion of DSV shares. Net Debt stood at KD 324.4 million as of December 31, 2021. Reported operating cash flow was KD 159.3 million for the full year of 2021.