By Gavin van Marle
Kuwait’s Agility Logistics recorded marginally increased profitability in the second quarter, despite seeing diminishing revenues. Revenue of KD309 million (US$1.024 billion) represented a 6 per cent decline on the KD328 million posted in the second quarter of 2015. However, earnings before interest, tax, depreciation and amortisation grew 12 per cent to reach KD29 million, compared with KD26 million in same period last year, while net profit grew 11 per cent year on year to KD15 million.
Agility Chief Executive Tarek Sultan said: “We started the year on a good note and are sustaining momentum as the year progresses. “Within our global integrated logistics business, we are making gains, even in the face of a challenging freight forwarding market, because we have found ways to be more efficient, improve productivity, demonstrate financial discipline and make operations more responsive to the marketplace and customers’ needs.”
The company has two main operations: logistics and infrastructure. Revenue for the much larger Agility Global Integrated Logistics (GIL) was KD233 million, a 10 per cent year-on-year decrease, which the firm said was mainly due to “low shipping and fuel rates in the market”. The division’s net revenue “remained flat when adjusted at constant currency rates, with margins expanding from 25 per cent in the second quarter of 2015 to 27 per cent in the second quarter this year”.
Mr. Sultan said: “Subdued trade forecasts for the year, to quote the WTO, continue to impact the freight forwarding market. However, Agility GIL was able to record volume growth in its core air and ocean markets and is focusing on products and markets that are growing despite sluggish overall volumes. “Growing demand for contract logistics in emerging markets – an area where Agility has long-established market leadership – coupled with improved yields in the freight business and better commercial discipline, has resulted in margin expansion within GIL.”
Agility Infrastructure saw revenue grow 12 per cent year on year to KD80 million, largely due to the number of new projects in its key Middle East region. The unit provides logistics-related services such as bulk fuel storage and transport, industrial real estate, airport and ground handling services and commercial real estate and facilities management. “Companies in the Agility Infrastructure group continue to grow as we tap into excellent opportunities in emerging markets and focus on improving efficiency across the board,” Mr. Sultan said.
“Although the external market environment continues to be a challenge, particularly to our commercial logistics business, we are continuing to improve our financial performance by growing the Infrastructure portfolio of companies and simultaneously driving transformation of our GIL business,” he continued.
Reprinted courtesy of The Loadstar (www.theloadstar.co.uk)