Agility Reports KD 38.6 Million Net Profit for the Second Quarter 2021

Numbers above are rounded

KUWAIT – August 14, 2021 – Agility, a leader in supply chain services, innovation and investment, today reported second quarter 2021 earnings of 18.32 fils per share on net profit of KD 38.6 million, an increase of 503.7% over the same period in 2020. EBIT increased 202.6% to KD 29.6 million, and revenue grew 26.6% to KD 112.2 million.

For the first 6 months of 2021, earnings were 24.33 fils per share on net profit of KD 51.2 million, an increase of 215.9% over the same period in 2020. EBIT increased 39.6% to KD 40.1 million, and revenue grew 13% to KD 220.2 million.

All of Agility’s largest businesses reported Q2 growth and profitability levels that were at or above pre-pandemic levels in 2019. “We’re proud of how we’ve been able to respond and recover from the challenges of the COVID-19 pandemic,” said Tarek Sultan, Agility Vice Chairman and CEO.

Agility is working to finalize the sale of its Global Integrated Logistics (GIL) business to DSV Panalpina A/S (DSV), in exchange for 19.3 million shares in DSV. Sultan said: “We see this transaction as a catalyst for Agility’s future growth. Agility will continue to grow its high-value business in emerging markets, and continue to invest in companies and technologies reshaping global supply chains.”

Reporting

For the second quarter, Agility is reporting GIL’s results on a limited basis. Reporting will be done as per IFRS 5, covering non-current assets held for sale and discontinued operations. On the balance sheet this quarter, GIL is reported as single line items as Assets and Liabilities Held for Sale. On Agility’s Profit and Loss (P&L) statement, GIL is reported as Income from Discontinued Operations.

Once the transaction has been completed, Agility’s investment in DSV will be reported as per IFRS 9 as a
“financial asset at fair value.”

Agility Global Integrated Logistics (GIL)

As noted above, GIL results in Q2 appear as one line item and are not consolidated with figures from other Agility businesses, as per IFRS 5, covering non-current assets held for sale and discontinued operations.

GIL continues to witness favourable market conditions in freight forwarding and growth in contract logistics, which drove a revenue increase of 33%. Higher volumes, yield improvements, combined with ongoing cost control practices, led to exceptional year-over-year improvement in GIL profitability for the quarter.

Agility’s Infrastructure Companies

Agility’s Infrastructure group of companies remains the main contributor to Agility’s profitability and has historically generated around 80% of Agility’s EBIT. Each entity within this group is pursuing its own growth strategy. Entities that have been impacted by COVID-19 are recovering, and all are continuing to execute their growth plans.  Infrastructure entities have seen solid performance over the years. Agility will continue to explore growth opportunities for these businesses moving forward. 

Agility Logistics Park (ALP) revenue increased 5% in the second quarter. Demand for warehousing space is still growing in regions where ALP has a presence, especially in the Middle East. ALP strategy is to increase its land bank in the countries where it operates and to provide high quality warehousing space to its customers.

Tristar, a fully integrated liquid logistics company, posted a 12.5% increase in revenue growth for Q2. This performance reflects improving market conditions and Tristar’s resilient and diversified business model. Tristar has a strong pipeline of growth opportunities across its business segments and is expected to deliver attractive returns. The company’s blue-chip clients have been key enablers of its success.

National Aviation Services (NAS) revenue reported 131.9% growth in Q2. NAS’s performance represents a full recovery to pre-pandemic levels of 2019. NAS’s rebound is attributed to three factors.  First, there has been an increase in flights in all of the countries served by the company, particularly Kuwait, Cote d’Ivoire, Uganda and Iraq. The increase in flights, coupled with significant cost reduction, has enabled NAS to improve margins. Second, NAS began new operations that have been profitable, particularly in Baghdad and Democratic Republic of Congo. Finally, the company’s investments in technology and digital health have paid off, contributing significantly to revenue in Kuwait and Baghdad.

United Projects for Aviation Services Company (UPAC) saw a 238.3% increase in revenue for Q2 compared with the same period in 2020. UPAC’s Q2 2020 revenue was impacted by the three-month rental waiver for its airport mall tenants in response to the COVID lockdown in Kuwait.

Revenue is still affected by ongoing travel restrictions imposed as a result of the pandemic. UPAC continues to take various measures to reduce the negative impact on its business. With a vaccination program fully underway in Kuwait, UPAC operations are showing signs of gradual recovery. The company anticipates an air traffic pick up by Q3 2021.

At Global Clearance House System (GCS), Agility’s customs modernization company, Q2 revenue increased 48.1%. The growth was driven by increased trade volumes and initiatives implemented by the company to spur its growth. GCS is looking into new customs modernization opportunities inside and outside of Kuwait as ways of diversifying its income.

Recap of Agility Q2 2021 Financial Performance

• Agility’s Net Profit increased 503.7% to KD 38.6 million. EPS was 18.32 fils vs. 3.04 fils a year earlier.
• Agility’s EBIT increased 202.6% to KD 29.6 million.
• Agility’s Revenue increased 26.6%, to KD 112.2 million and Net Revenue increased by 24.6%.
• Agility enjoys a healthy balance sheet with KD 2.4 billion in assets. Net Debt for continued operations stood at KD 300 million as of June 30, 2021. Reported operating cash flow was KD 88.8 million for the second quarter of 2021.

Closing

Sultan said: “After the deal with DSV closes, a new chapter of Agility’s story will be begin. We will continue to grow our existing businesses, which have proved to be solid and stable performers over the years, and we will invest in companies, technologies, and digital initiatives that are reshaping our industry. We are proud of the fact that we have increased shareholder value by more than 5 times over the last decade, and we remain committed to growing shareholder value in years to come.”