Kuwait-based Agility, one of the largest logistics firms in the Middle East and North Africa, reported a 503.7 per cent surge in net profit in the second quarter, amid a broader recovery in the regional and global economies.
Net profit for the three months ending June 30 grew to 38.6 million Kuwaiti dinars ($128.2m), up from KD6.4m in the same period last year.
Revenue increased 26.6 per cent to reach KD112.2m ($373m).
“We’re proud of how we’ve been able to respond and recover from the challenges of the Covid-19 pandemic,” Agility chief executive and vice-chairman Tarek Sultan said.
The global logistics sector is recovering from the debilitating impact of the Covid-19 pandemic, which disrupted trade and supply chains worldwide. With Covid-19 related restrictions being eased and forecasts for the global economy being revised upwards, the logistics industry is set for growth.
Agility is also working on a deal to sell its Global Integrated Logistics to DSV Panalpina in exchange for 19.3 million shares in the Danish transport and logistics company.
“We see this transaction as a catalyst for Agility’s future growth. Agility will continue to grow its high-value business in emerging market and continue to invest in companies and technologies reshaping global supply chains,” Mr Sultan said.
In the second quarter, GIL's revenue rose 33 per cent due to “favourable market conditions” in freight forwarding and growth in contract logistics.
Following completion of the transaction, Agility's investment in DSV will be reported on the basis of International Financial Reporting Standard 9 as “financial asset fair value".
Agility's profit in the second quarter was largely supported by the performance of its core infrastructure assets. The subsector typically contributes to 80 per cent of the company's earnings before interest and tax.
“Infrastructure entities have seen solid performance over the years. Agility will continue to explore growth opportunities for these businesses moving forward,” the company said in a statement.
Agility's aviation subsidiaries National Aviation Services and United Projects for Aviation Services Company reported revenue growth of almost 132 per cent and 238.3 per cent, respectively, for the second quarter.
NAS's performance was supported by a full recovery to pre-Covid levels due to an increase in flights to destinations such as Kuwait, Cote d’Ivoire, Uganda and Iraq.
The increase in flights and significant cost reductions helped the company improve margins. The company also benefited from profitable routes, such as the Democratic Republic of the Congo and Iraq.
Meanwhile, UPAC benefited from a low baseline. The company's second-quarter revenue in 2020 was severely affected by the three-month rental waiver for its airport mall tenants due to the coronavirus lockdown imposed in Kuwait.
The company sees gradual recovery in operations and air traffic by the third quarter of 2021, helped by Kuwait's vaccination programme.