Agility's full-year profit slides as expenses rise amid Covid-19 pandemic

Company is optimistic about growth prospects this year after a strong performance in the first two months of 2021, its chief executive says

Agility is bullish about growth despite reporting a lower full-year profit. Yasser Al Zayyat / AFP

Agility, one of the largest logistics companies in the Middle East and North Africa, reported a 52 per cent drop in 2020 full-year profit as restructuring expenses rose and interest income fell amid the coronavirus pandemic.

Net profit attributable to equity holders of the parent company for the period ending December 31 fell to 41.57 million Kuwaiti dinars ($137.38m), Agility said in a statement to the Dubai Financial Market, where its shares trade. Restructuring expenses rose to 12.4m dinars while interest income fell 75 per cent to 2m dinars.

Revenue for the reporting period rose 3 per cent year-on-year to 1.62 billion dinars. Its finance costs also climbed last year.

“The reason for the decline in profitability is mainly due to the impact of the Covid-19 on part of our operations in addition to recording a loss of 28m dinars against Amghara land [valuation],” the company said.

The Covid-19 pandemic dealt a heavy blow to global trade last year and disrupted supply chains as governments enforced movement restrictions and border closures to stem the spread of the outbreak. Global trade volumes contracted 9.6 per cent last year, but they are expected to grow by about 8 per cent in 2021 and then moderate to 6 per cent growth in 2022, according to the International Monetary Fund estimates.

Agility’s total assets rose 9 per cent annually to 2.27bn dinars. Total liabilities climbed 16 per cent to 1bn dinars.

Agility's core logistics business, Global Integrated Logistics (GIL), posted net revenue of 283.7m dinars, up 3.8 per cent compared to 2019, according to the company. Net revenue grew in contract logistics and air freight but declined in ocean freight and fairs & events.

The company’s airfreight volumes, as well as ocean freight volumes, declined 15.6 per cent and 12 per cent respectively as a result of the Covid-19 pandemic, it said. However, air freight yields increased, driven by continued demand for exceptional shipments including personal protective equipment and other medical gear.

“We are optimistic about the future of that business and its ability to create value for our shareholders,” Agility vice chairman and chief executive Tarek Sultan said.

“Our optimism is reinforced by the strong performance we continue to see in the first couple of months of 2021, as net revenue and EBIT [earnings before interest and taxation] continue to grow.”

Net revenue at the company’s infrastructure group fell 12 per cent during the reporting period.

Agility Logistics Parks's revenue grew 5.4 per cent, driven by increased demand for warehousing capacity from customers, mainly in Kuwait and Saudi Arabia. In Africa, Mozambique and Ivory Coast operations came online, joining the existing Ghana operation as part of Agility’s Africa expansion strategy, it said.

United Projects for Aviation Services Company, an Agility unit that provides facilities management services, saw a 49.9 per cent drop in revenue, primarily due to the suspension of operations at the Kuwait International Airport and the continuation of travel restrictions imposed as a result of the pandemic.

At GCS, Agility’s customs modernisation company, revenue dropped 22.9 per cent in 2020.