Kuwait’s Agility, one of the biggest logistics companies in the Middle East and North Africa, has reported a 20 per cent increase in first-quarter net profit on healthy growth at two UK-based aviation companies it acquired last year.
Net profit for the three months to the end of March 31 increased to 15.3 million Kuwaiti dinars ($49.7 million) from 12.8 million dinars in the same period in 2022, the company said on Saturday.
Revenue for the period rose by nearly 143 per cent to 320.5 million dinars, from 132.1 million dinars a year earlier.
Earnings before interest, taxes, depreciation and amortisation (ebitda) rose 78.1 per cent to 60.4 million dinars, from 33.9 million dinars in the previous year.
The company's earnings per share surged nearly 19 per cent annually to 6 fils.
“Two of our large 2022 acquisitions — Menzies and HG Storage International — contributed to Q1 earnings for the first time,” Agility’s vice chairman Tarek Sultan said.
“On the investment side, equity markets improved in Q1, which was reflected in our investments.
“Like all global businesses, we view ongoing inflation, high interest rates, currency volatility and other factors as reasons for continued caution about the near-term economic outlook. We are also closely watching the Kuwait land contracts issue.”
Agility acquired UK-based aviation services company John Menzies for £763 million ($921.5 million) in August last year, merging its subsidiary National Aviation Services (NAS) with the British entity to create the world’s biggest aviation services provider.
The combined entity in the deal, Menzies Aviation, provides air cargo services, fuel services and ground services at airports around the world.
In March last year, Agility acquired a 51 per cent stake in UK-based HG Storage International for 65 million dinars in a deal aimed at expanding its global portfolio. HG Storage International, a joint venture between HNA Group and Glencore Group, was acquired by Agility’s UAE subsidiary Tristar.
The aviation industry's growth was affected by the coronavirus-induced slowdown but has since recovered as restrictions and flight bans caused by the health crisis ended.
The value of the global airport services market is projected to nearly triple to more than $290.2 billion by 2029, from an estimated $98 billion in 2022, at a compound annual rate of about 17 per cent, latest data from Fortune Business Insights said.
Agility has been capitalising on this momentum by acquiring companies that could complement its operations and expansion in the region and beyond.
In 2021, it sold its Global Integrated Logistics business to Danish transport and logistics company DSV Panalpina for $4.77 billion. Following the deal, Agility would have 19.3 million shares in DSV, making it the second-largest shareholder in the Danish company, it said at the time.
The combined ebitda for Agility’s controlled businesses in the first quarter of 2023 was 56.8 million dinars on revenue of 320.5 million dinars, annual increases of 55 per cent and 142.5 per cent, respectively.
Agility’s aviation services unit reported a nearly 816.5 per cent annual increase in revenue, which includes the performance of NAS and Menzies Aviation.
Menzies Aviation’s revenue was 154.4 million dinars in the first quarter, while ebitda was 20.2 million dinars.
“There was a broader underlying recovery in aviation volumes in Q1 2023 compared with Q1 2022. In the first quarter of 2023, ground handling volumes and fuelling volumes grew, offsetting declines in cargo volumes and revenue relative to Q1 2022,” Agility said.
Consolidated revenue at Tristar rose 85.5 per cent annually, while ebitda climbed more than 29 per cent, with the maritime and fuel farms units delivering the highest growth.
Aside from the HG Storage acquisition, Tristar was driven by the renewal of two large long-term peacekeeping contracts, making Tristar the UN's leading supplier, and the growing maritime business.
Agility has assets worth 3.6 billion dinars on its balance sheet. Net debt stood at 821.6 million dinars, excluding lease obligations, as of March 31, 2023, the company said.
