Agility reports rise of 20% in Q1 net profit to KD15.3m
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Kuwait’s Agility reports 20% rise in net profit to KD15.3m for Q1 2023

Kuwait’s Agility reports 20% rise in net profit to KD15.3m for Q1 2023

The company’s EBITDA increased 30 per cent to KD44m, and revenue grew 17 per cent

Agility logistics park

Kuwait-based Agility has reported Q1 2023 earnings of KD15.3m, or 6 fils per share, an increase of 20 per cent over the same period in 2022.

Agility’s EBITDA increased 78.1 per cent to KD60.4m and revenue grew 142.7 per cent to KD320.5m.

On a like-for-like basis, excluding the performance of Menzies Aviation and HG Storage International, which were acquired in August last year, the company’s EBITDA increased 30 per cent to KD44m, and revenue grew by 17 per cent.

Agility vice chairman Tarek Sultan said: “Agility’s first quarter results reflect the healthy growth in our controlled businesses. Two of our large 2022 acquisitions – Menzies and HG Storage International – contributed to Q1 earnings for the first time. On the investment side, equity markets improved in Q1 which was reflected in our investments. That said, we continue to look beyond short-term movement in equity markets, focusing instead on the strategic value, growth and returns that these investments can deliver for our shareholders over the long term.

“Like all global businesses, we view ongoing inflation, high interest rates, currency volatility and other factors as reasons for continued caution about the near-term economic outlook. We are also closely watching the Kuwait land contracts issue.

“Even so, we are excited by the strategic transformation that has taken place in Agility since 2021. We believe we are positioned to grow and drive value for our shareholders, customers, employees and communities as we evolve further.”

Agility controlled businesses’ highlights

Agility’s controlled businesses are the businesses the company controls and operates and whose performance is consolidated and reported through Agility’s profit and loss statement. In Q1, the combined EBITDA of its controlled businesses was KD56.8m on revenue of KD320.5m, with increases of 55 per cent and 142.5 per cent, respectively, over Q1 2022.

The company’s controlled businesses includes Menzies Aviation. Its revenue was KD154.4m in Q1 2023, and EBITDA was KD20.2m for the same period. These Q1 results include the results of Menzies Aviation, acquired in Q3 2022, and the legacy National Aviation Services (NAS) business, now combined with Menzies.

Agility’s aviation services results for Q1 2023 represent an 816.5 per cent increase in revenue relative to Q1 2022, when Agility was reporting solely on NAS’s results. The combined entity’s EBITDA margin is 13.1 per cent.

There was a broader underlying recovery in aviation volumes in Q1 2023 compared with Q1 2022.

In the first quarter of 2023, ground handling volumes and fueling volumes grew, offsetting declines in cargo volumes and revenue relative to Q1 2022.

The consolidation of Menzies and NAS has resulted in a larger global company with operations in more locations.

Agility’s Tristar’s Q1 consolidated revenue grew 85.5 per cent versus Q1 2022. EBITDA increased by 29.2 per cent in Q1, driven mainly by growth in the maritime and fuel farms segments.

Tristar acquired a 51 per cent ownership stake in HG Storage International (trading as Aquarius Energy) at the end of August 2022. Tristar’s growth can be attributed to the addition of HG Storage International; renewal of two large long-term peacekeeping contracts that make Tristar the top supplier to the UN (as listed on UN procurement website); and the booming maritime business.

Tristar remains focused on growing and deepening relationship with its blue-chip clients and is positioned to deliver sustainable, long-term value to shareholders.

As a group, Agility’s other controlled businesses reported EBITDA of KD23.3m and revenue of KD82.2m, reflecting increases of 10.5 per cent and 17.5 per cent, respectively, over Q1 2022.

The main contributors were Agility Logistics Parks (ALP) which reported a 10.2 per cent revenue growth in Q1. ALP Kuwait performed well but still faces a challenge to future operations at certain facilities situated on land leased from the Kuwaiti government. In other parts, ALP is continuing to pursue its growth strategy by increasing and optimising its existing land bank, developing new projects, and looking to acquire additional land, especially in the Middle East and Africa.

United Projects for Aviation Services Company (UPAC) reported a 13.7 per cent increase in revenue for in Q1. The increase was primarily attributable to a rebound in airport-related services and parking, following the reopening of Kuwait International Airport and the removal of COVID restrictions, as well as the Hala-Feb holiday season, which boosted passenger volume and UPAC revenue.

UPAC is a co-investor in the $1.3bn Reem Mall on Abu Dhabi’s Reem Island. The mall officially opened to the public in February 2023, with 82 units currently occupied and operating. UPAC expects additional openings by more tenants over the coming months. The mall is the region’s first, fully integrated omni-channel 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, Agility’s customs-modernisation company, saw Q1 revenue grow by 12.1 per cent versus the same period in 2022.

Other highlights

Agility holds non-controlling minority stakes in a number of businesses, both listed and non-listed. In Q1 2023, the carrying value of those stakes was roughly KD1.6bn inline with Q1 2022 value.
“We have witnessed a relative improvement in the global equity markets, which has been reflected in our investment values. However, as a long-term investor, Agility is focused on investing in sectors it believes will drive value and in companies with strong management that have showcased the ability to generate value,” Sultan said.

Given continued market uncertainty and the significance of the DSV stake in determining its overall value, Agility has entered into multi-year, funded equity collar agreements with several banks to protect the value of the investment and shareholders’ value.

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