Agility holds up


The annual results of Kuwait’s Agility confirm recent trends witnessed for most of major freight forwarders, who have had to employ cost management tactics to offset falling top lines in 2016.

Despite a 5.3% drop in gross revenues, which fell to Kuwaiti Dinars (KD)1.23bn ($4bn) from KD1.3bn one year earlier, the 3PL and infrastructure developer grew net revenues by 5.6% to KD429.1m last year.

Year-on-year growth rates for net sales in the fourth-quarter decelerated, but the drop in gross revenues was less pronounced than on an annual basis, contributing to a steeper growth rate in EBITDA, up 18.4% to KD31.4m in the quarter ended 31 December 2016.

By comparison, annual EBITDA surged 15.4% to KD115.2m ($376.7m), outpacing the rise in net income, which soared 10.6% to KD59.1m from KD53.4m in 2015 – earnings per share grew at the same rate, while net income margin expanded by 70 basis points to 4.8% year-on-year.

Meanwhile, return on equity was up 50 basis points to 6.4%, while return on assets was virtually unchanged at 3.8%. 

The group’s chief revenue driver, its global integrated logistics (GIL) division, which is undergoing a “technology-driven transformation”, managed to hold up despite challenging market conditions.

GIL’s gross revenues were down 7% to KD928.4m, but “net revenues grew 1% on a constant currency basis”.

“GIL continues to make progress,” Agility said, adding that profitability was on its way up as the EBITDA margin rose to 3.5% from 2.7%.

Notably, “air freight tonnage grew by 9.8% and TEU grew by 9.3%, with better margins in both air and ocean”, while the contract logistics unit “also grew by 7.4% this year.”

Details were scant when it came to its infrastructure portfolio of assets – it said it grew “by 1.1% on a reported basis (14.8% on a constant currency basis)”, which at EBITDA level, “translates into a 30.1% increase driven mainly by Agility Real Estate and Tristar”.

“Agility Real Estate continues to be the strongest contributor to Agility’s performance… (it) opened new distribution centres for Dammam, Saudi Arabia; and opened the first Agility Distribution Park in Ghana, which is fully leased,” it noted.

At group level, its net debt position remains negligible, which gives it flexibility when it comes to deploying new capital for deal-making, which is important if the Gulf’s largest logistics company plans to meet its ambitious EBITDA target of $800m for 2020.

Finally, other highlights included “a cash dividends distribution of 15% (15 fils per share)” as well as “a bonus shares distribution of 10% (10 shares for every 100 shares) for the fiscal year 2016” and the announcement of a new share buyback programme.

Source: Transport Intelligence, March 14, 2017

Author: Alessandro Pasetti