Property boosts Agility profits but freight is flat

Middle East headquartered global freight forwarder Agility reported third quarter earnings up 18.1% to 14.2 fils per share on net profit of KWD17.8m, an increase 17.4% over the same period in 2016.
However, the  growth was due mainly to a strong performance by its infrastructure business; the forwarding business was relatively flat, it said.
EBITDA earnings grew 18.3% to KWD34.2m while revenue increased 15% to KWD358.5m.
For the first nine months of 2017, earnings were 39.1 fils per share, up 14.2%, and net profit was KD 49.2m, up 13.7%. EBITDA earnings for the first nine months was KWD97.6m, an increase of 16.5%; revenue was KWD1,021.1m, up 11.1%.
Vice chairman and chief executive, Tarek Sultan, said: “We remain on track to meet our 2020 EBITDA target of $800m. Agility’s Infrastructure portfolio of companies continue to drive performance, and we are heavily investing in further growing their footprint in emerging markets across the Middle East, Asia and Africa.” 
The global logistics business saw double-digit growth in air and ocean tonnage, and contract logistics revenue growth. “Even so, it’s a tough market because capacity constraints and higher freight forwarding rates continue to affect profitability,” Sultan said. “Looking ahead, we are investing in technology so that we can better serve our customers online, and drive productivity, efficiency, and operational excellence.”
Third quarter revenue for the core Agility Global Integrated Logistics (GIL) business, grew by 19.4% to KD 273m. Agility said its strategy of committing to defined solutions and customer segments had increased revenue across all products and generated growth in all customer segments. Air and ocean revenue increased by over 20%, as a result of a 16.1% growth in air tonnage and 12% increase in ocean TEUs. Project Logistics also improved revenue by 27.3%.
Net revenue in the third quarter increased 2.4%, primarily because of growth in contract logistics, which has been performing well in the Middle East and Asia Pacific.
But net revenue margins shrunk to 22.6% compared with 26.3% in the third quarter of 2016, as capacity constraints and higher freight market rates reduced forwarding yields.  
As a result, EBITDA in the third quarter grew only by 1.4% compared with the prior year although, excluding foreign exchange effects, GIL’s EBITDA grew 3.4% in Q3.  
Agility’s Infrastructure group EBITDA earnings rose 24%, to KD 29.4m in the third quarter, while revenue grew 4% to KD 91m. 
Agility Real Estate posted healthy revenue growth as it focused on improving efficiency of the existing assets and in developing new warehouses in the Arabian Gulf and Africa.