Agility reports 29% drop in Q3 profit on lower revenue

The company is now seeing 'recovery across most of our business lines', chief executive says

Agility, one of the Middle East's largest logistics firms, said third quarter profit declined on lower net revenues. AFP

Agility, one of the largest logistics firms in the Middle East and North Africa, reported a 29 per drop in third-quarter profit as net revenue and interest income fell amid the coronavirus pandemic.

Net profit attributable to its owners declined to 15.3 million Kuwaiti dinars (Dh50.1m), the company said in a statement to the Dubai Financial Market, where its shares trade. Net revenue fell 10 per cent year-on-year to 120.3m dinars, while restructuring expenses jumped to 4m dinars, from 99,000 dinars during the same period last year.

Interest income plunged 80 per cent to 478,000 dinars.

Agility has operations in 100 countries and is listed in Dubai and Kuwait.

“While we – like many businesses – are still feeling the impact of Covid-19 we are also seeing recovery across most of our business lines, albeit with each business recovering at a different pace,” Tarek Sultan, Agility vice chairman and chief executive, said. “Agility benefited from early and decisive measures taken to contain costs and preserve cash, and is well poised to navigate what is likely to continue to be a volatile market for some time.”

Agility’s Global Integrated Logistics (GIL) division's revenue rose 5.1 per cent to 71.4m dinars during the quarter with air freight net revenue increasing 39.1 per cent, driven by “continued demand for exceptional shipments related to life sciences” supplies.

Ocean freight net revenue, however, declined 14.5 per cent, as volume and yields fell.

The company’s infrastructure group revenue fell 24.4 per cent during the period, while Agility Logistics Park sales grew 5.6 per cent on the back of “increased demand for warehousing spaces from customers that are mainly suppliers of necessity goods”.

The pandemic also affected performance at United Projects for Aviation Services Company (UPAC), a division that provides facilities management services, “due to the cessation of operations at the Kuwait International Airport during the lockdown period and subsequent resumption of traffic at a lower capacity”.

The coronavirus pandemic brought the global trade, travel and tourism industries to a halt and has tipped the global economy into a recession, expected to be the deepest since the Great Depression, according to the International Monetary Fund. The multilateral lender forecast global gross domestic product would shrink by 4.4 per cent this year. Agility’s nine month profit dropped 50 per cent to 31.5m dinars as net revenue fell 6 per cent to 364m dinars and interest income plunged 73 per cent to 1.56m dinars.