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Agility reports 61% decline in 1H net profit

Global logistics provider Agility reported first-half net profit of KWD16.2 million (US$52.9 million), a decrease of 61.3% from the same period in 2019.

Group EBITDA declined by 20.1% to KWD75.8 million, revenue declined 1.3% to KWD765.1 million, and net revenue decreased 3.7%.

The economic fallout from the pandemic had an uneven effect on Agility businesses, said Tarek Sultan, Agility vice chairman and CEO.

Contract logistics business and logistics parks weathered the crisis “reasonably well” because demand for storage space had been steady or increased as customers looked to add to safety stock or support pandemic-driven increases in e-commerce sales.

Other businesses, such as aviation and airport operations, were directly impacted by the decline in air travel and traffic, said Sultan. These segments are now pivoting towards the development of pioneering new technologies that will be essential to re-enabling global travel.

Global Integrated Logistics’ (GIL) first-half EBITDA was KWD28.8 million, a 1.3% increase from the same period in 2019. This was driven by strong contract logistics, project logistics, and air freight results, as well as cost control.

GIL’s net revenue in the first half amounted to KWD135.8 million, in line with last year’s performance. Net revenue increased in contract logistics, project logistics, and air freight, but fell in ocean freight and fairs & events. GIL gross revenue was KWD570.6 million, a 2.5% increase from same period in 2019.

Volumes were down in both air freight (-23.6% in tonnage terms) and ocean freight (-14.8% in TEUs terms), in the first half of this year, due to COVID-19 impact on demand due to lockdowns, production stoppages, and economic contraction across industries and geographies.

However, air freight yields in the first half rose due to capacity shortages and a spike in demand for urgent shipments of PPE and other medical equipment. First-half air freight net revenue increased 17% versus the same period a year earlier, while ocean freight net revenue decreased 16% vs. the same period last year.

Contract logistics achieved healthy growth (7% net revenue growth), mainly in the MEA Region (Kuwait, Saudi Arabia), as the result of the addition of new facilities and increased operating efficiencies.

Project logistics showed strong performance across all regions with 25% net revenue increase, driven by new capital projects and positive volume development from existing customers. Fairs & events net revenue fell 46% with the cancellation and postponement of key events.

On the other hand, Agility’s infrastructure group registered EBITDA of KWD56 million for the first half of 2020, a decline of 18%, while group net revenue fell 8.4%.

Photo by Tobias A. Müller on Unsplash

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