Agility’s net profit in 2021 reaches $3.2 billion; revenue reaches $1.6 billion

Agility, a leader in supply chain services, infrastructure and innovation, reported full year 2021 earnings of 464.36 fils per share on net profit of KD 977.4 million (3. 2 billion dollars), thus registering an increase of 2250% compared to the same period in 2020.

Announcing the results for the 12-month period ending December 31, 2021, Agility said this growth was mainly due to a strong performance of its business portfolio and also a one-time gain of almost KD 1 billion from the sale of its commercial logistics core. company, Global Integrated Logistics (GIL), to DSV, the world’s third-largest freight and logistics provider, in exchange for 19.3 million shares of DSV.

Agility is now DSV’s second largest shareholder with an 8% stake, he added.

The Kuwaiti group said Ebitda also increased by 13.2% to KD109 million and revenue increased by 22.1% to KD486.2 million.

Much of the revenue comes from the sale of its core trade logistics business, Global Integrated Logistics (GIL), to DSV, the world’s third-largest freight and logistics provider, in exchange for 19.3 million shares in DSV.

As a result, Agility recorded a one-time gain of almost KD 1 billion and is now DSV’s second largest shareholder with an 8% stake.

One-time gain from participation agreement

Going forward, Agility’s business profile can be divided into two segments: controlled and uncontrolled businesses.

* Controlled: Agility continues to own and operate the businesses that have historically generated 80% of company profits; these companies are “controlled” by Agility. Of these, the five most financially significant companies are Agility Logistics Parks, Tristar, National Aviation Services, UPAC and Global Clearinghouse Systems.

*Uncontrolled: In addition, Agility holds minority stakes in companies through its investments in established sectors and businesses in freight, real estate, e-commerce enablement, ESG technology and others digital technologies. Agility’s stake in DSV represents the bulk of these investments. These are “uncontrolled” companies. The collective value of these investments now represents 57% of the company’s assets.

On the strong performance, Agility Vice President Tarek Sultan said, “Our performance in 2021 has been outstanding. In addition to a significant one-time gain from the sale of GIL, our business portfolio performed well. , returning to pre-Covid levels of profitability. We will seek to accelerate the growth of these businesses, as they contribute to our core businesses and our ebitda.”

Sultan pointed out that the DSV transaction and the sale of GIL fundamentally changed the structure of the business and reset the baseline for continuing operations.

“Like most businesses, Agility has been impacted by the COVID pandemic in 2020 and 2021. Looking ahead, despite challenging market conditions and geopolitical risks, we expect our continued business performance to be strong and our operating results for 2022 will show a minimum of 20% growth over this year,” noted Sultan.

“The Company’s Board of Directors and management team continue to be focused on growing and enhancing shareholder value over time, and we are confident that with M&A initiatives underway, as well as the various organic and inorganic growth initiatives we are working on through the controlled sector entities, we will continue to create shareholder value in the medium and long term,” he added.

Commenting on the investments, Sultan said: “Today we own around 8% of DSV, the world’s third largest freight forwarder. This investment is a big part of our balance sheet, and we continue to like the fundamentals of this sector as we believe it will grow.”

He also noted that Agility’s debt levels are expected to increase in line with business growth needs, but that the company “intends to keep its borrowings within prudent limits.”

“Our goal is growth. Agility is a long-term, multi-business operator and investor aiming to create value for our stakeholders with a disciplined investment strategy that focuses on companies in high-growth sectors with strong fundamentals, bolstered by management teams with strong records, governance best practices and alignment with shareholders,” Sultan said.

“We enter 2022 with confidence. We have a successful track record of growing and developing businesses in a sustainable and responsible way. We have shown that we know how to create and unlock value for our shareholders, customers, employees and communities. We believe our best days are ahead,” he added.

The board announced a cash dividend distribution plan of a minimum of 20 fils per share for 2021, 2022 and 2023, starting with the distribution this year.

For 2021, the board has recommended a cash dividend distribution of 20 fils per share in addition to a 20% stock bonus (20 shares for every 100 shares). Cash and stock dividends are subject to the approval of the General Meeting.

Companies controlled by agility

Agility Logistics Parks (ALP) revenue in 2021 was roughly in line with 2020 results, which benefited from increased demand for warehousing facilities as businesses and government entities continued to store more goods in the face of to the continued disruption of the supply chain.

Demand for warehouse space continues to grow in the MEA and South Asia regions where ALP operates. ALP optimizes its existing land reserve and completes its offer of available land to meet customer demand.

In 2021, ALP added approximately 150,000 m² of built storage area. Operations in Kuwait, Saudi Arabia and Africa have performed well and ALP is seeking new markets for additional growth.

Tristar, a fully integrated liquid logistics company, recorded a 16.5% increase in revenue for the year 2021 compared to 2020.

Profitability more than doubled and was in line with forecasts. This performance was driven by a strong recovery in international oil prices, good performances in the Road and Transport segments, and favorable charter rates for dry bulk in the Maritime segment. Tristar expects another year of growth in 2022.

National Aviation Services (NAS) reported 65.4% year-over-year revenue growth for 2021. The increase reflects the widespread recovery in commercial aviation as flight, passenger and freight increased. In addition, NAS took cost reduction measures which had a positive impact on overall performance and added new operations in the Democratic Republic of Congo, South Africa, Iraq (Baghdad) and Kenya.

Strategic Acquisitions

NAS performance also benefited from the launch of technology solutions and applications to support governments and passengers by improving traveler health and safety. In 2022, NAS and Agility publicly announced that they were in discussions for the potential acquisition of John Menzies, one of the largest aviation service providers in the world.

United Projects for Aviation Services Company (UPAC) recorded a 14% increase in revenue for 2021. This increase was due to a rebound in airport-related services and parking, following the gradual reopening of the international airport of Kuwait in the third quarter. UPAC expects a gradual increase in airport traffic in 2022 and beyond, and a favorable outlook for its business.

UPAC is co-developer of the Reem shopping center in Abu Dhabi, on Reem Island. Construction is over 95% complete. The retail, entertainment and leisure attraction is scheduled to open in 2022. Carrefour, the anchor tenant, recently opened at Reem Mall.

At Global Clearinghouse Systems (GCS), Agility’s customs modernization company, fiscal 2021 revenue grew 32.1%. This increase is attributable to increased trading volumes and corporate growth initiatives. GCS is looking for opportunities to support its future growth and diversify its sources of income.

Investments in non-controlled companies

Agility’s holds minority interests in a number of listed and unlisted companies. The largest investment in this portfolio is DSV, which is listed on Nasdaq Copenhagen.

Other investments in the portfolio cover a number of sectors including: freight, real estate, e-commerce enablement, ESG and supply chain technologies. The book value of non-controlling interests was KD 1.9 billion at the end of 2021.

Agility takes equity stakes in companies and assets in high-growth sectors to create value for its shareholders and expose Agility companies to innovative technologies and companies that can help them future-proof their own activities.-TradeArabia news service

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