Agility posts solid 3Q results despite revenue decline
The air freight business grew considerably in terms of volume with a tougher yield compared to the prior year quarter, resulting in flat net revenue.
November 11, 2016
By Donald Urquhart
Agility has announced its financial results for the third quarter of 2016, reporting a net profit of KD15.17 million (US$50 million), an increase of 11 per cent compared to the third quarter of 2015, despite revenues being down 7.0 per cent over the same period to KD312 million. EBITDA stood at KD28.90 million, a 19 per cent increase compared to the same period in 2015.
Tarek Sultan, CEO of Agility, said: “We have now been seeing continuous underlying increase in the profitability of the business. This is driven by steady progress in turning around our Global Integrated Logistics business, as well as by continued financial performance and growth in our Infrastructure group of companies.”
“We continue to make gains in the face of a challenging business context: from sluggish economic and trade growth in key regions to political uncertainty in others. I attribute our company’s gains to sharper strategic focus and ongoing commitment to financial discipline, even as we invest in the markets, products, and technologies that will transform our business and help us continue to lead in the future,” he added.
Revenue for Agility Global Integrated Logistics (GIL) stands at KD228.65 million in Q3 2016, an 8.0 per cent decline from Q3 of 2015. Net revenues were marginally lower in this quarter relative to the same period in 2015 with margins expanding from 25 per cent to 26 per cent in Q3 2016.
Sultan added: “In this quarter, GIL continued to see growth in demand for contract logistics in emerging markets, as well as strong performance in ocean freight, both in terms of volume and yield, whereas in air freight the business grew considerably in terms of volume with a tougher yield compared to the prior year quarter, resulting in flat net revenue.”
“The main impact to net revenue shortfall remains in the general slowdown in our Project Logistics business as a result of the slowdown in the Oil and Gas market,” he said.
Sultan said GIL’s road map remains consistent with the first priority to continue to drive commercial improvement through a trade lane management approach and focus on high growth markets and industries. Second, continue transforming the underlying business through ongoing technology, process and management improvements. Third, maintain financial discipline and a lean and agile structure that is in-line with business needs, he said.
Agility’s Infrastructure companies contributed KD85.91 million to third quarter 2016 revenues. Agility Infrastructure’s group of companies continues to be the largest contributor’s to Agility’s profitability.
Agility Real Estate, the largest contributor in the group, grew its revenues by 7.0 per cent in Q3 2016, compared to the same period in 2015. Agility opened its first logistics distribution park in Ghana this quarter, the first of a series of planned distribution parks connecting African countries to each other and to the world.
Agility’s subsidiary NAS, the fastest growing ground-handling and aviation services company in emerging markets, won a 10-year concession to operate lounges in nine airports in Morocco, it added.