Agility's H1 net profits plunge 61pc despite increase in airfreight revenue
KUWATI-BASED Agility saw its profits dive in the first half, although its airfreight business performed well
24 August 2020 - 19:00
Revenue for the first half decreased by 1.3 per cent year on year to KWD765.1 million (US$2.50 million), earnings before interest, tax and depreciation (EBITDA) was down 20.1 per cent to KWD75.8 million and net profit slipped by 61.3 per cent to KWD16.2 million.
The decline was largely driven by its infrastructure division, which was affected by its general aviation businesses.
Meanwhile, its global integrated logistics business saw its EBITDA for the half year increase by 1.3 per cent on a year earlier to KWD28.8 million and revenues were flat at KWD135.8 million. This was driven by strong contract logistics, project logistics, and airfreight results, as well as a sharp focus on containing costs, the company said.
Volumes were down in both airfreight and ocean freight in the first half of this year, by 23.6 per cent in airfreight (tonnage) and 14.8 per cent in ocean freight, due to Covid-19 impact on demand due to lockdowns, production stoppages, and economic contraction across industries and geographies, reports London's Air Cargo News.
However, the first half saw higher yields in airfreight due to capacity shortages and a spike in demand for urgent shipments of PPE and other medical equipment. First-half airfreight net revenue increased 17 per cent compared with the same period a year earlier, while ocean freight net revenue decreased 16 per cent against last year.
Contract logistics achieved 7 per cent net revenue growth, mainly in the Middle East region as the result of the addition of new facilities and 'increased operating efficiencies'.
Project logistics registered a 25 per cent net revenue increase, driven by new capital projects and positive volume development from existing customers. Fairs and events net revenue fell 46 per cent with the cancellation and postponement of key events.
Tarek Sultan, Agility vice chairman and chief executive, said the economic fallout from the pandemic has had an uneven effect on Agility businesses: 'Our contract logistics business and logistics parks have weathered this reasonably well because demand for storage space has been steady or increased, especially as customers have looked to add to safety stock or support pandemic-driven increases in e-commerce sales. In many instances, we are experiencing accelerated adoption of disruptive and emerging technologies related to the Covid-19 pandemic or underlying CSR paradigms.'
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