Kuwaiti logistics firm Agility has seen its earnings before interest, taxes, depreciation, and amortization (EBITDA) in the second quarter (Q2) grow 14 per cent to 32.6 million Kuwaiti Dinar (KD)($107 million) and revenue increase 10.9 per cent to 342.1 million KD.
In the first half of the year, net profit was 31.4 million KD up 11.6 per cent from the first-half of 2016 and EBITDA was 63.4 million KD, a rise of 15.6 per cent while revenue was 662.6 million KD, an increase of 9.1 per cent.
Revenue for Agility Global Integrated Logistics (GIL), the company’s core logistics business, grew 9.6 per cent in Q2, to 255.2 million KD. Air and ocean revenue grew, driven by volume growth of 14.7 per cent and 12.9 per cent in air tonnage and ocean TEUs, respectively.
These it says are growth rates above the market averages. Contract logistics revenue also grew, particularly in the Middle East and Asia Pacific, with the improved performance coming from a combination of new and existing warehousing facilities.
However, net revenue in Q2 was flat compared to the same period a year ago, primarily due to significant yield degradation in freight forwarding because of capacity constraints and higher market rates. Net revenue margins contracted to 24.9 per cent compared with 27.3 per cent in Q2 2016. EBITDA decreased 5.8 per cent to 9.1 million KD in Q2 for the same reason.
Agility vice chairman and chief executive officer, Tarek Sultan says: “Agility’s Infrastructure group was the primary driver of performance in Q2. Our industrial real estate business and aviation services company delivered particularly strong results.
“Revenue in our logistics business is growing because air and ocean volumes are increasing and contract logistics revenue is expanding, but rate pressure continues to affect profitability.”
To achieve its 2020 EBITDA target of $800 million, Agility says it has two areas of focus are investing in its infrastructure businesses in emerging markets, and secondly, it is continuing to improve the underlying fundamentals of its commercial logistics business.