Kuwait's Agility posts 5.5% rise in Q2 net profit
Agility, the largest Gulf Arab logistics company, reported a 5.5% rise in second-quarter net profit on Thursday.
The firm, which has operations in more than 100 countries, said net profit in the three months to June 30 was 13.5 million dinars ($44.6 million), compared to 12.8 million dinars in the same period a year ago.
Second-quarter revenue fell 3.9% to 328.4 million dinars from 341.7 million, as the company was hit by currency volatility.
Tarek Sultan, Agility’s CEO, commented: “The global logistics market is a mixed bag in terms of growth, with continued sluggishness in China and Europe; and ongoing pressure on rates.
"In this environment, we are pleased to report that Agility continues to post steady growth in profitability.
"Agility’s Global Integrated Logistics business continues to drive margin expansion through commercial transformation, financial discipline, and productivity improvements powered by technology.
“Agility’s Infrastructure group of companies, which capture investment opportunities in niche logistics-related segments in emerging markets, each have their own strategy. Across the board, however, there is an emphasis on improving efficiency and growing potential through regional and customer expansion.”
Agility shareholders in May approved the company's plans to issue long-term bonds.
Adjusted at constant currency rates, GIL revenues have decreased by 1% compared to the same period last year. The company attributed this slight revenue decline it the general logistics market's performance and the planned end of some large contracts.
The freight forwarding market showed mixed performance in the second quarter of the year relative to the beginning of the year, with a softer air freight market and consistent ocean freight market.
The contract logistics market, especially in emerging economies, continues to grow however.
This growth in contract logistics demand, coupled with improved yields in Agility’s air freight business, and better commercial disciplines, has resulted in margin expansion within GIL.
Net revenue has increased by 1% (adjusted at constant currency rates: +3%), with margins expanding from 24% in Q2 2014 to 25% in Q2 2015.
“We feel confident in both our strategy and in our investment in building the disciplines to execute the strategy,” Sultan shared.
He added: “The external market environment will continue to be a challenge for the foreseeable future with economic growth slowing in some countries, but improving in others.
"While we cannot control these external factors, we will be strategic in our investment choices, focusing on countries, verticals, and products that have long-term potential."