Agility, a long-term investor and operator in supply chain services, infrastructure, and innovation, announced earnings of KD 14.2 million, or 5.55 fils per share, in the second quarter of 2023, a reduction of 11.7% from the same period in 2022. Higher interest rate charges arising from a general increase in interest rates and the increase in debt necessary to finance the company’s acquisitions last year reduced net profit this quarter. EBITDA at Agility climbed by 63.4 percent to KD 60.5 million, while sales jumped by 136.8 percent to KD 327.8 million.
On a like-for-like basis — excluding the performance of Menzies Aviation and HG Storage International, which were acquired in August 2022 — Agility’s EBITDA increased by 9.5 percent to KD 41.5 million, and revenue grew 8.9 percent in the second quarter of 2023.
For the first six months of 2023, Agility’s net profit stood at KD 29.4 million, an increase of 2.3 percent EBITDA increased by 70.4 percent, and revenues increased by 139.7 percent compared to last year.
Q2 2023 Performance
Agility Vice Chairman Tarek Sultan said: “We’re pleased with our growth and performance this quarter. We continue to see good results in our operating businesses due to organic growth and our acquisitions in 2022. Global equity markets performed better this quarter, reflecting in our investments segment. Nevertheless, we continue to take a longer-term view of our strategic investments. We also continue to look for opportunities to drive and unlock value for our shareholders, customers, employees and communities.”
Agility Controlled Businesses
Agility’s controlled businesses are those that the firm oversees and operates, and the results of which are consolidated and presented on Agility’s profit and loss statement. In Q2, our managed companies’ combined EBITDA was KD 61.2 million on sales of KD 327.8 million, representing growth of 54 percent and 136.8 percent respectively, over Q2 2022.
The performance of the company’s-controlled businesses is reported under three groups:
Aviation Services
Menzies Aviation’s revenue was KD 162.2 million and EBITDA was KD 21.9 million in Q2 2023, representing an increase of 861.8 percent and 367.2 percent respectively, over the same period last year when Agility was reporting only on NAS’s performance. These Q2 2023 figures include Menzies Aviation, which was bought in Q3 2022, as well as the legacy National Aviation Services (NAS) Company, which is now merged under “Menzies Aviation.” Today, the merged entity’s EBITDA margin is 13.5 percent.
Menzies Aviation’s performance have improved as the post-pandemic aviation sector has recovered, including increased flight volumes. Volumes have entirely recovered in most regions, with the exception of East Asia, where lockdown restrictions were the harshest, and volumes are now steadily increasing. Menzies has a number of new businesses.
The integration of NAS with Menzies is now complete, and the operational and financial synergies are being realized.
Fuel Logistics
Tristar’s Q2 consolidated revenue grew 76.2 percent vs. Q2 a year earlier, and EBITDA increased 33.5 percent .This growth is driven mainly by the momentum of our Maritime and Fuel Farms segments. Tristar’s addition of HG Storage International also contributed to this growth. This quarter’s results reflect Tristar’s continued operational improvement and demonstrate the effectiveness of its diversified portfolio.
Other Controlled Businesses
As a group, Agility’s other controlled businesses reported EBITDA of KD 23 million and revenue of KD 82.1 million, increases of 1 percent and 9 percent, respectively, over Q2 2022.
The main contributors were:
Agility Logistics Parks (ALP). ALP reported 7.8 percent second-quarter revenue growth. ALP Kuwait performed well but still needs to work on future operations at certain facilities on land leased by the Kuwaiti government. Elsewhere, ALP continues pursuing its growth strategy by increasing and optimizing its existing land bank, developing new projects, and looking to acquire additional land, especially in the Middle East and Africa.
United Projects for Aviation Services Company (UPAC) reported a 1.2 percent increase in revenue for Q2. The increase was primarily attributable to a rebound in airport services and parking and the beginning of the summer holiday season for travel.
UPAC is a co-investor in Abu Dhabi’s $1.3 billion Reem Mall on Reem Island. The mall officially opened to the public on Feb. 16, 2023, with more than 110 units currently trading; and almost 50 percent of GLA committed. UPAC expects a gradual opening by more tenants over the coming months. The mall is the region’s first fully integrated Omni channel retail ecosystem with digital, e-commerce, and logistics capabilities. It combines all consumer and retail services to ensure a seamless customer experience.
Global Clearinghouse Systems (GCS). At GCS, Agility’s customs-modernization and ports Operation Company, second-quarter revenue grew 6.3 percent vs. the same period in 2022. GCS is focused on delivering optimal efficiency and services to its customers.
Agility’s Investments
Agility holds non-controlling minority stakes in several businesses, both listed and non-listed. In Q2, the carrying value of those stakes was roughly KD 1.7 billion. Agility has improved in global equity markets, positively impacting our investment value.
Agility has entered into multi-year, funded equity collar agreements with several banks to protect the value of the DSV investment, which is the most significant investment in this segment.
Recap of Agility Q2 2023 Financial Performance
Agility’s net profit stood at KD 14.2 million, and its EPS was 5.55 fils.
Agility’s EBITDA increased 63.4 percent to KD 60.5 million.
Agility’s revenue increased 136.8 percent to KD 327.8 million, and net income increased 177.3 percent.
Agility enjoys a healthy balance sheet with KD 3.7 billion in assets. Net debt stood at KD 881.5 million as of June 30, 2023 (this excludes lease obligations). The reported operating cash flow was KD 89.7 million for the six months of 2023, an increase of 268.2 percent.
