KUWAIT – February 16, 2019 — Agility, a leading global logistics provider, today reported 2018 net profit of KD 81.1 million, or 56.06 fils per share, an increase of 18.4% from 2017. Revenue for the year reached KD 1,550.2 million, and EBITDA was KD 154.8 million, increases of 10.2% and 14.5%, respectively.
For the fourth quarter 2018, Agility reported a net profit of KD 22.2 million, or 15.35 fils per share, an increase of 15.1% over Q4 2017. EBITDA for Q4 2018 was KD 40.8 million, an increase of 8.4%.
Board of Directors Recommendation
Agility’s Board of Directors has recommended a cash dividend distribution of 15% (15 fils per share), along with 15% bonus shares (15 shares for every 100 shares), subject to approval of the General Assembly.
Agility Consolidated Results
“Agility has improved profitability for shareholders for 10 consecutive quarters. In 2018, Agility posted double-digit EBITDA growth for the third year in a row,” said Agility Vice Chairman and CEO Tarek Sultan.
Sultan said the company continues to invest in its future by building more than 1 million sqm of new warehousing and industrial facilities across the Middle East and Africa; building, through one its subsidiaries, the $1.2 billion Reem Mall mega project in Abu Dhabi; and investing more than $100 million in Shipa, its digital logistics platform. Cash flow from operations has been healthy and growing, while free cash flow has been limited as a result of capital expenditure that led to increased borrowing to fund strategic investments. Agility’s dividend recommendation reflects its desire to reward shareholders without inhibiting future business growth.
Sultan said Agility remains committed to achieving its target of $800 million EBITDA. However, the timeline may be stretched beyond 2020. Agility will be exploring different avenues for unlocking and maximizing value for our shareholders, including investments, acquisitions, and public offerings of certain businesses in its portfolio, he said.
Agility Global Integrated Logistics
Agility Global Integrated Logistics (GIL) revenue grew 8.6% to KD 1,153.1 million in 2018, driven by strong growth across core products. Net revenue also grew by 4.9% year-over-year, with 22.9% net revenue margins, as a result of better air freight yields and stable ocean freight yields. Full year EBIDTA rose 6.3% to KD 35.9 million, attributable to strength in freight forwarding and contract logistics, consistent execution of GIL’s commercial strategy, and management’s focus on efficiency.
On core products: contract logistics grew 8.7% its revenue, and GIL outperformed the market in both air and ocean volumes. GIL air freight tonnage increased 9.2% and ocean freight TEUs grew 6.7% vs. global market air freight volume growth of 4.5% and global ocean freight volume growth of 3.5%.
In air freight, the fastest growing verticals were fashion, industrial and high-tech. In ocean freight, Agility saw strong trans-Pacific trade lane growth, particularly in anticipation of US-China tariff implementation. However, there was an overall decline in demand and pressure on margins on these same ocean lanes for the second half of 2018. Agility GIL made new contract logistics investments in Australia, China, India and the Middle East in 2018, and has an ongoing effort to drive margin improvements in contract logistics.
In Q4, GIL revenue was KD 293.5 million, flat with Q4 2017. Net revenue increased 2.1% and net revenue margins increased to 23.1% vs. 22.7% in Q4 2017. Performance was driven by strength in freight forwarding, where air and ocean volumes increased 6.9% and 1.4%, respectively, for the fourth quarter. Strength in air freight was a result of high growth across multiple trade lanes and sales channels and especially strong demand from GIL’s strategic customers. During Q4, the US-China trade dispute and tariffs slowed overall air freight growth. GIL had stable ocean freight performance across geographies and sales channels with strong net revenue growth from strategic customers.
GIL continues to invest in technological transformation to improve efficiency and better serve customers. Digital leadership in the logistics industry is the key to its future growth, and the company is investing in its global operating platform, digital transformation strategy, and digital logistics platform.
Agility’s Infrastructure Companies
For full year 2018, Infrastructure group EBITDA grew 8.4% and revenue increased 15%. Agility is investing in these companies to drive its future growth.
Agility Logistics Parks (ALP), previously known as Industrial Real Estate, reported 6.6% revenue growth for the year, despite challenging market conditions. In Kuwait, ALP’s focus is driving the efficiency of existing assets. ALP completed construction and development of 85K sqm of warehousing space in 2018. In Riyadh, ALP completed and delivered 80K sqm of warehousing space and began constructing three facilities of 40K sqm each to be delivered in 2019 and 2020. In Africa, ALP began construction of new facilities in Ghana, Mozambique and Ivory Coast, which will deliver additional warehousing space of about 70K sqm in 2019. In addition, ALP added Nigeria as part of its Africa expansion program.
Tristar, a fully integrated liquid logistics company, posted 33.7% revenue growth in 2018, results propelled by full-year impact of certain contracts and new business wins from new and existing customers. Tristar continues to look for opportunities to unlock value for its shareholders.
National Aviation Services (NAS), Agility’s airport services subsidiary, grew revenue 17.3% in 2018. NAS benefitted from strong growth in Afghanistan and India; major turnarounds that yielded positive Q4 results in Morocco and Tanzania; and a full year of operations in Uganda. Performance in Cote d’Ivoire, Liberia, Rwanda and Abu Dhabi was flat. NAS Kuwait operations were affected by increased costs for operational and airport authority requirements, in addition to the suspension of Wataniya Airlines.
United Projects for Aviation Services Company (UPAC), a leading real estate and facilities management company operating in Kuwait, experienced a good year in 2018. Revenue fell 1.9% in 2018 due to lower volumes in Kuwait car park operations due to the recent movement of passenger traffic to the new terminals, but UPAC improved efficiencies in key operations at Kuwait International Airport, Sheikh Saad Terminal and Discovery Mall. Outside Kuwait, UPAC is developing the $1.2 billion Reem Mall project in Abu Dhabi, in partnership with National Real Estate Company (NREC).
During 2018, UPAC signed a five-year, KD 5.4 million concession contract with the Incheon International Airport Corporation (IIAC) for the development, operations and maintenance of the parking lot at Terminal 4 (T4) at Kuwait International Airport.
GCS, Agility’s customs modernization company, posted growth in revenue and EBITDA in 2018. Revenue increased 12.3% as a result of fresh trade activity, plus a new stevedoring contract win with Kuwait Ports Authority. GCS also launched a new brokerage business. It is implementing initiatives to drive efficiency and improve profitability.
“Agility’s strategy has been consistent over the last several years: drive digital leadership and efficiency improvements in GIL, and invest in expansion and new developments for our logistics parks, fuel logistics, airport services and commercial real estate businesses. As always, we thank our shareholders, customers, employees, and partners for their trust and support in Agility. We look forward to an even better 2019,” Sultan said.
Financial Performance for the full year 2018
- Agility’s net profit reached KD 81.1 million, an 18.4% increase from KD 68.5 million in 2017. EPS was 56.06 fils, compared with 47.31 fils a year earlier.
- EBITDA was KD 154.8 million, a 14.5% increase from 2017.
- Agility’s revenue for 2018 was KD 1,550.2 million, an increase of 10.2% from KD 1,407 million in 2017. Net revenue increased by 5.9%.
- GIL’s revenue was KD 1,153.1 million, an 8.6% increase from 2017.
- Infrastructure group revenue was KD 412 million compared with KD 358.2 million in 2017, a 15% increase.
- Agility enjoys a healthy balance sheet with KD 1,843.2 million in assets. Its net debt position was KD 135.1 million as of Dec. 31, 2018. Operating cash flow was KD 97.7 million for full year 2018.
Agility is a global logistics company with $5.1 billion in annual revenue and 22,000+ employees in more than 100 countries. It is one of the world’s top freight forwarding and contract logistics providers, and a leader and investor in technology to enhance supply chain efficiency. Agility is a pioneer in emerging markets and one of the largest private owners and developers of warehousing and light industrial parks in the Middle East, Africa and Asia. Agility’s subsidiary companies offer fuel logistics, airport services, commercial real estate and facilities management, customs digitization, and remote infrastructure services.
For more information about Agility, visit www.agility.com