Agility plans to borrow to partly fund US$1.5 billion worth of investments in property and logistics as it targets a 150 per cent jump in income by 2020, its chief executive has said.
The Kuwaiti logistics firm will use a mix of debt and equity to finance its investments, Tarek Sultan said.
“We will finance both from our own balance sheet, equity from our balance sheet but also by engaging in financial markets and the financial institutions, and working with them to finance these opportunities,” he said in an interview.
“We are pretty much debt-free. Even if we were to acquire some debt, most of the debt would be structured on a project basis, in relation to very specific projects and programmes.”
The firm posted a flat Ebitda – earnings before tax, interest, taxes, depreciation and amortization – of 100 million Kuwaiti dinars (Dh1.21 billion) last year, as revenue declined by 4 per cent compared with 2014 to 1.3bn dinars. But for this year Agility is projecting a 30 per cent increase in Ebitda and a 10 per cent increase in revenue, as it works towards its 2020 Ebitda target of US$800m.
Soon the company expects to finalise an $800m syndicated loan for a mall on Al Reem Island in Abu Dhabi, a joint venture project between its subsidiary United Projects for Aviation Services Company and Kuwait-based real estate developer National Real Estate Company.
Agility is also investing in industrial real estate in Saudi Arabia and could borrow between $200m and $300m to fund these projects. It started investing this year in logistics facilities in the Saudi capital Riyadh and Dammam in the eastern province, and could potentially invest in the Red Sea port city of Jeddah.
The company is also negotiating with the Saudi government to enter public-private partnerships in the logistics and real estate sectors, as the kingdom undertakes a privatisation programme to shore up dwindling revenue from oil.
Agility is also interested in the sale of airport and port assets in Kuwait, where the government has announced privatisation plans.
The company is focusing on cost cuts and growth in emerging markets to reach its Ebtida target this year.
“We are expecting to be able to increase our Ebitda by 30 per cent [this year] through a combination of revenue growth and cost-reduction opportunities,” Mr Sultan said.
“Going forward, we expect to be able to grow that business by focusing on the emerging markets and by embracing some of the technology changes that we have been investing in for the past few years.”
The company is focusing on growing its logistics business, which contributes 75 per cent to revenue, although its revenue fell by 2 per cent last year from 2014.
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