Agility Reports FY 2023 Net Profit of KD 83.6 Million and recommends a 10 fils per share as dividends

Numbers above are rounded.

KUWAIT – March 31, 2024 – Agility, a global leader in supply chain services, infrastructure, and innovation, today reported Q4 2023 earnings of KD 26 million, or 10.2 fils per share almost in line with the same period a year earlier. Q4 EBITDA grew 21.6% to KD 77.5 million and revenue increased 2.2% to KD 343.9 million.

For full year 2023, Agility net profit was KD 83.6 million, or 32.7 fils per share, an increase of 22%. Full-year EBITDA was up 42.4% to KD 257.2 million and revenue increased 56.7% to KD 1,353 million. It is worth noting that due to the accounting treatment of our investment in DSV, only our share of DSV cash dividends gets reflected in our income statement, however, if we take into account our prorata share of DSV’s EBITDA for the year 2023 that would increase Agility’s EBITDA by approximately KD 90 million.

FY 2023 Performance

Agility Vice Chairman Tarek Sultan said: “Agility delivered on a track record of positive momentum in 2023, despite ongoing volatile markets and the challenging macro environment. Agility ended the year with a 42.4% growth in EBITDA, driven by strong performance across our operating entities.

Agility’s Investments segment benefited from a general uplift in global equity markets in the third quarter of the year. Given the materiality of this segment to our balance sheet, and in particular our DSV investment, Agility closed two funded equity collar agreements to safeguard the value of DSV stake and get access to relatively cheaper funding.

We enter 2024 optimistic about the future and the opportunities to grow both globally and in Kuwait, driving value for our shareholders, employees, customers, and communities.”

End of Year Dividends Recommendation

Agility’s board is recommending a cash dividend of 10%, equivalent to 10 fils per share for the year 2023. This recommendation is subject to the approval of the General Assembly.

‌Sultan said: “The dividends reflect our determination to deliver value to shareholders, especially after a period of volatility and uncertainty in global capital markets.” 

The Full year cash dividend is an additional dividend pursuant to the interim dividends announced on March 28, following the board of directors’ approval to issue two interim dividends:

• An interim cash dividend distribution of KD 25.5 million (US $83 million), equivalent to 10 fils per share.
• A stock or in-kind dividend distribution estimated at KD 800 million (US $2.6 billion), representing 49% of the shares owned by Agility in its subsidiary, Agility Global PLC, which is pursuing a listing on the Abu Dhabi Securities Exchange. Agility Global PLC is expected to discuss, on or before listing, its own dividend distribution to be paid throughout 2024.

Agility Controlled Businesses 

Agility’s controlled businesses are those the company operates and owns majority stakes in, and whose performance is consolidated and reported through Agility’s profit and loss statement. For FY2023, the consolidated EBITDA of Agility’s controlled businesses was KD 264.2 million on revenue of KD 1.4 billion, increases of 35.4% and 56.7%, respectively, over 2022.

For the FY 2023, performance of the company’s-controlled businesses is reported under three groups:

Aviation Services

Menzies Aviation reported revenue of KD 665.8 million and EBITDA of KD 97.8 million for the FY 2023, increases of 126.5% and 135.5% over the same period a year earlier. The figures include the consolidated performance of Menzies Aviation and Agility’s legacy National Aviation Services (NAS).

Globally, air travel reached 95% of 2019 levels in December 2023. Menzies expects that all major markets will recover to pre-Covid levels during 2024. Total air traffic, according to the International Air Transport Association, grew 37% in 2023.

All geographic regions served by Menzies posted year-on-year revenue growth due to increases in passenger flights. The Americas (which includes North and South America) performance benefitted from contract wins in different markets. In Europe, Menzies experienced significant growth and launched successful new operations. Menzies recently announced major contract wins in Spain (launching in H1 2024) and expects progress on other new operations in 2024. The company’s cargo business performed well in 2023. While recovery across Africa generally was slower, the Middle East and South Asia posted significant growth.

Fuel Logistics 

Tristar’s FY consolidated revenue grew 33.3% vs. FY 2022, and EBITDA increased 26.2%. This performance was driven by Tristar’s diversified portfolio of services.

Tristar ended 2023 with revenue exceeding $1 billion. This was driven by the acquisition of HG storage in 2022 in addition to the growth in the Fuel and Road Transport & Warehousing segments, underpinned by new contract wins. The Maritime segment showed continued resilience as markets remained strong throughout the year. Tristar expects to maintain its momentum in 2024.

Other Controlled Businesses 

As a group, Agility’s other controlled businesses reported EBITDA of KD 99.4 million on revenue of KD 350.2 million.

The main contributors were:

Agility Logistics Parks (ALP). ALP reported 7.7% full-year revenue growth. ALP is continuing to pursue its growth strategy by increasing and optimizing its existing land bank and developing new projects.

United Projects for Aviation Services Company (UPAC). Full-year 2023 revenue for United Projects for Aviation Services Company (UPAC) increased 2.6%. The increase was driven mainly by a rebound in airport-related services and an increase in the frequency of daily flights and travelers at Kuwait International Airport. UPAC anticipates steady growth in 2024.

UPAC is a co-investor in Abu Dhabi’s $1.3 billion Reem Mall on Reem Island. The mall officially opened to the public in February 2023. To date, 153 units are trading and almost 72% of Gross Leasable Area (GLA) is committed. UPAC expects additional openings by more tenants in coming months. The mall is the region’s first, fully integrated omnichannel retail ecosystem with digital, e-commerce, and logistics capabilities. It brings together all consumer and retail services to ensure a seamless customer experience.

Global Clearinghouse Systems (GCS).  At GCS, Agility’s customs modernization and port operations company, Full year revenue grew 5.3% vs. the same period in 2022.

Agility’s Investments 

Agility holds non-controlling minority stakes in a number of businesses, both listed and non-listed. As of December 31, 2023, the carrying value of those stakes was roughly KD 1.5 billion. The main investment in this segment is Copenhagen-based logistics company DSV. Agility’s stake in DSV remains a strategic investment, and the company has moved to safeguard the value of its DSV holding by entering into multi-year, funded equity collar agreements with several banks. This transaction protects the value of the holding from market volatility, while also allowing Agility to have access to cheaper funding.

Recap of Agility FY 2023 Financial Performance

• Agility’s net profit was KD 83.6 million, an increase of 22.8%, and EPS was 32.7 fils.
• Agility’s EBITDA increased 42.4% to KD 257.2 million.
• Agility’s revenue increased 56.7% to KD 1,353 million and net revenue increased 72.8%.
• Agility enjoys a healthy balance sheet with KD 3.7 billion in assets. Net debt was KD 888.4 million as of December 31, 2023 (this excludes lease obligations). Reported operating cash flow was KD 221.3 million for the full year 2023, an increase of 121.2%.