Kuwait's Agility posts 7% increase in annual profit
Net profit rose to 86.6 million Kuwaiti dinars in 2019, from 81.1m dinars in the previous year
Kuwaiti firm Agility warned that global economic "volatility" may impact its core logistics business in 2020 after it posted a seven per cent increase in full-year profit as revenue rose.
Net profit rose to 86.6 million dinars (Dh1 billion) in 2019, from 81.1m dinars in the previous year, Kuwait-listed Agility said in an emailed statement on Saturday. Net revenue increased 6.7 per cent to 531.4m dinars year-on-year.
"We move into 2020 cognizant that we are likely to see volatility in the global economy that may impact our logistics business, as well as slower market activities in certain markets in the Middle East and Africa that may affect certain portfolio companies," Tarek Sultan, Agility's vice chairman and chief executive, said. "We are confident that despite these challenges, we are well-positioned to navigate through them."
Agility's board of directors recommended a cash dividend of 20 fils per share, along with 10 per cent bonus shares, pending approval of the general assembly.
The company recorded a 4.4 per cent rise in fourth-quarter net profit.
Net income for the three months ending December 31 reached 23.2m dinars, up from 22.2m dinars in the same quarter in 2018, Agility said. Quarterly net revenue rose 17.3 per cent.
Agility's core logistics business Global Integrated Logistics (GIL) posted a 2.5 per cent drop in full-year revenue-- but remained flat on a constant currency basis--due to a "challenging year" for the freight forwarding industry, the firm said.
The unit's earnings before interest, tax, depreciation and amortization for 2019 declined 1.4 per cent to 35.4m dinars year-on-year mainly due to costs associated with accelerating its digital transformation, Agility said.
"Global trade tensions, regional economic uncertainty, and financial market pressure in emerging markets all contributed to a challenging year for our logistics business," Mr Sultan said. "Internally, the costs associated with our investment in digitization also had an impact; one that we believe will continue in 2020."
GIL's fourth quarter EBITDA was 10.9m dinars, a 3.8 per cent decline over the same period in 2018. The decrease was due to higher operating expenses related to new contract logistics facilities and investments in digital transformation.
GIL’s fourth-quarter net revenue reached 70 million dinars, a 3.3 per cent increase from the same quarter in 2018. The net revenue increase was driven mainly by growth in project logistics, contract logistics and events.
Fourth quarter air freight volume decreased by seven per cent in tonnage as a result of falling trade volumes and lower demand from customers across industries and regions, Agility said. This volume decline was partially offset by higher yields - or net revenue per ton – which increased 1.1 per cent from the same quarter last year.
Agility's infrastructure group of companies posted EBITDA growth of 7.7 per cent and revenue increased 14 per cent in 2019. For the last quarter of 2019, EBITDA grew 6.1 per cent and revenue increased 12.8 per cent.
“Driving operational efficiency and better customer service through digitization continue to be a priority," Mr Sultan said. "It is an investment in our future."
Updated: February 22, 2020 06:40 PM