Kuwait’s Agility reports sharp jump in 2021 net profit to $3.2bn

Besides the one-time gain from the logistics unit sale, company’s portfolio of businesses returned to pre-Covid profitability levels

An Agility facility in Kuwait City. The company's revenue for 2021 rose 22.1 per cent year-on-year to 486.2 million dinars. AFP

Kuwait-based Agility, one of the largest logistics companies in the Middle East and North Africa, reported a sharp rise in 2021 full-year net profit after an exceptional gain from the sale of its GIL logistics unit to Danish company DSV Panalpina, it said.

Net profit attributable to equity holders of the parent company for the period ending December 31 reached 977.4 million Kuwaiti dinars ($3.21 billion), up from 41.57m dinars in the corresponding period in 2020, Agility said in a statement on Saturday.

Revenue for the reporting period rose 22.1 per cent year-on-year to 486.2m dinars. Earnings before interest, taxes, depreciation and amortisation (Ebitda) increased 13.2 per cent to 109m dinars.

“Agility’s 2021 performance was exceptional. In addition to a significant one-time gain from the GIL sale, our portfolio of businesses performed well, returning to pre-Covid profitability levels,” Tarek Sultan, vice chairman of Agility, said.

“We will be looking to accelerate growth in these businesses as they contribute to our core operations and Ebitda.”

Global trade increased an annual 25 per cent in 2021 to a record $28.5 trillion after being battered by the coronavirus pandemic, a report from the UN Conference on Trade and Development said in February. It increased about 13 per cent compared with 2019, the agency said.

During the fourth quarter of last year, trade in goods reached about $5.8tn, a new quarterly record. During the same three-month period, trade in services hit $1.6tn, slightly above pre-pandemic levels.

Agility’s total assets were worth 2.9bn dinars, while net debt stood at 324.4m dinars as of December 31, 2021, the company said.

Its debt levels are expected to increase in line with business growth needs, but Agility “intends to keep borrowing within prudent limits”, Mr Sultan said.

“Looking ahead, despite the challenging market conditions and geopolitical risks, we expect performance of our continuing operations to be strong and expect our operating results for 2022 to show a minimum of 20 per cent growth compared with 2021,” he added.

In 2021, Agility sold its core logistics business, Global Integrated Logistics (GIL), to DSV, which is the world’s third-largest freight and logistics provider, in exchange for 19.3 million shares in DSV. Agility reported a one-time gain of about 1bn dinars and is now the second-largest shareholder in DSV with an 8 per cent stake.

Agility’s board plans to distribute cash dividends of a minimum of 20 fils a share for the years 2021, 2022 and 2023, starting with payout in 2022, the statement said.

For 2021, the board has recommended a cash dividend distribution of 20 fils a share in addition to 20 per cent bonus shares (20 shares for every 100 shares).

The cash and stock dividends are subject to approval by the general assembly, Agility said.

Agility Logistics Parks’ revenue in 2021 was in line with 2020 results, driven by increased demand for warehousing facilities in the Middle East, Africa and South Asia in the face of supply chain disruption, it said.

United Projects for Aviation Services Company, an Agility unit that provides facilities management services, reported a 14 per cent increase in revenue, driven by a rebound in airport-related services and parking following the phased reopening of Kuwait International Airport in the third quarter of 2021.

At Global Clearinghouse Systems, Agility’s customs modernisation company, revenue increased 32.1 per cent in 2021, driven by higher trade volumes.

Meanwhile, Tristar, a liquid logistics company, posted a 16.5 per cent increase in revenue for 2021 on a strong recovery in international oil prices and favourable dry bulk charter rates.

National Aviation Services (NAS), a Kuwait-based airport services and ground-handling company owned and backed by Agility, reported a 65.4 per cent growth in revenue last year, driven by a broad recovery in commercial aviation as flights, passengers and cargo volumes grew.

In addition, NAS added operations in Congo, South Africa, Iraq and Kenya.

Agility acquired a 13.2 per cent share in UK-based aviation company John Menzies, the holding company of Menzies Aviation, for £73.4m ($100m) last month.

This is expected to complement the operations of Nas, which is present in more than 55 airports in the Middle East, Africa and South Asia, and manages more than 50 airport lounges.