Agility GIL’s air freight revenues grow 17% in H1
Global logistics provider Agility recorded net profit of KD 16.2 million, a decrease of 61.3 percent over the same period in 2019. Air freight and ocean freight volumes for the company’s Global Integrated Logistics were down in the first half of this year, by 23.6 percent in air freight (tonnage) and 14.8 percent in ocean freight (TEUs), due to Covid-19 impact on demand due to lockdowns, production stoppages, and economic contraction across industries and geographies.
H1 saw higher yields in air freight due to capacity shortages and a spike in demand for urgent shipments of PPE and other medical equipment. First-half net revenue for air freight increased 17 percent versus the same period a year earlier, while ocean freight net revenue decreased 16 percent versus the same period last year.
Tarek Sultan, Agility vice chairman and CEO, said, “We entered 2020 with our business on sound footing, which is one reason that we were able to react quickly to the sweeping impact of the Covid-19 pandemic. We acted immediately to protect employees, customers, and communities, including providing donated logistics support for local governments and NGOs around the world. We also took steps to bring operating expenses and other costs in line with the new environment. If the crisis has demonstrated anything, it is the essential value of logistics and supply chain providers in times of severe disruption.”
Sultan noted that its contract logistics business and logistics parks managed to weather the storm thanks to the increasing demand for storage space. The logistics provider has also witnessed accelerated adoption of disruptive and emerging technologies related to the Covid-19 pandemic or underlying CSR paradigms. “Other Agility businesses, such as aviation and airport operations have been directly impacted by the decline in air travel and traffic and are now pivoting towards the development of pioneering new technologies that will be essential to the re-enablement of global travel,” he added.
Agility Global Integrated Logistics (GIL)
Global Integrated Logistics’ first-half EBITDA was KD 28.8 million, a 1.3 percent increase from the same period in 2019. This was driven by strong contract logistics, project logistics, and air freight results, as well as a sharp focus on containing costs.
GIL’s H1 net revenue was KD 135.8 million, in line with last year’s performance. Net revenue increased in contract logistics, project logistics, and air freight, but fell in ocean freight and fairs and events. GIL gross revenue was KD 570.6 million, a 2.5 percent increase from same period in 2019.
Contract Logistics achieved healthy growth (7 percent net revenue growth), mainly in the MEA Region (Kuwait, Saudi Arabia) as the result of the addition of new facilities and increased operating efficiencies. Project Logistics showed strong performance across all regions with 25 percent net revenue increase, driven by new capital projects and positive volume development from existing customers. Fairs and events net revenue fell 46 percent with the cancellation and postponement of key events.
Starting in Q1, GIL introduced a range of both temporary and permanent cost reduction measures in response to the pandemic. The measures are intended to ensure continued strength of profitability performance during a period of falling and volatile global trade activity. GIL continues to focus on operational productivity as well as customer solutions to respond to the changing market environment.
Sultan said, “In response to the Covid-19 crisis, all entities across the board activated their BCPs and cost alignment measures. And even during these difficult times, each business has contributed to several CSR activities including delivering food to families in Kuwait and supporting the Kuwait Red Crescent Society’s initiatives. Agility also provided free warehousing and local transportation services as part of its Covid-19 response. In Mozambique, we moved PPE for seven hospitals and arranged for storage at the newly built Agility Logistics Park in Maputo.”
“The full impact of Covid-19 is not yet clear - there are many possible scenarios and many unknowns - but we are taking steps to weather the storm and emerge stronger. We are adjusting to the reality on the ground within each respective business, and bringing the cost structure in line with the new levels of business we are seeing. We have a strong focus on cash, with a view to having ample liquidity to cover us for the foreseeable future,” Sultan said.
“Ultimately, we feel that our long-term vision of infrastructure growth in emerging markets, our growing focus on disruptive technologies and digital enablement for logistics, and expansion into new market segments like e-commerce, is more important than ever. We would like to thank our employees, customers and shareholders for their support during this difficult period. We are confident that together, we can build back stronger and better,” Sultan said.