Agility, a leading global logistics provider, reported a revenue of KD765.1 million ($2.49 billion) for the first six months, down 1.3 per cent over last year’s figures of KD775 million ($2.52 billion), mainly hit by poor aviation and airport operations amid Covid.

For the six-month period ending June 30, Agility said its profit plunged 61.3 per cent to KD16.2 million over the same period last year. The Ebitda declined by 20.1 per cent to KD 75.8 million.

However, high yields in air freight helped Agility’s Global Integrated Logistics (GIL) business maintain first-half profit and revenue on par with 2019.

Tarek Sultan

GIL, which includes air and ocean forwarding and contract logistics, recorded a 1.3 per cent year-on-year Ebitda increase to KD28.8 million.

“This was driven by strong Contract Logistics, Project Logistics, and Air Freight results, as well as a sharp focus on containing costs,” the Kuwait-based 3PL group which also includes logistics parks, customs, liquid logistics and aviation services, said in a statement.

GIL’s H1 net revenue was KD135.8 million, in line with last year’s performance. Net revenue increased in contract and project logistics, and air freight, but fell in ocean and event logistics. GIL gross revenue was KD 570.6 million, a 2.5 per cent increase from same period in 2019.

Tarek Sultan, vice chairman and CEO, said the economic fallout from the Covid-19 pandemic had an uneven effect on Agility’s businesses.

“Our contract logistics business and logistics parks have weathered this reasonably well, because demand for storage space has been steady or increased, especially as customers have looked to add to safety stock or support pandemic-driven increases in e-commerce sales,” he explained.

According to Agility, the volumes were down in both air and ocean freight in the first half of this year, by 23.6 per cent and 14.8 per cent respectively  due to Covid-19 impact on demand due to lockdowns, production stoppages, and economic contraction across industries and geographies.

“However, H1 saw higher yields in air freight due to capacity shortages and a spike in demand for urgent shipments of PPE and other medical equipment,” it said.

As a result, air freight net revenue increased 17 per cent year on year, while ocean freight net revenue decreased 16 per cent. Contract logistics achieved 7 per cent net revenue growth, mainly via operations in Kuwait and Saudi Arabia, while project logistics was a star performer, with a 25 per cent net revenue increase, driven by new capital projects and “positive volumes” from existing customers, Agility noted.

Sultan pointed out that the economic fallout from the pandemic has had an uneven effect on Agility businesses.

“Our contract logistics business and logistics parks have weathered this reasonably well because demand for storage space has been steady or increased, especially as customers have looked to add to safety stock or support pandemic-driven increases in e-commerce sales,” he stated.

In many instances, we are experiencing accelerated adoption of disruptive and emerging technologies related to the Covid-19 pandemic or underlying CSR paradigms.

“Other Agility businesses, such as aviation and airport operations have been directly impacted by the decline in air travel and traffic and are now pivoting towards the development of pioneering new technologies that will be essential to the re-enablement of global travel,” he added.

Agility’s Infrastructure group too registered a decline with its Ebitda falling 18 per cent to KD56 million for the first half. This decrease was driven mainly by UPAC, NAS and GCS entities, which experienced significant declines as a result of the pandemic.

In contrast, Agility Logistics Parks (ALP) and Tristar proved to be resilient during the first half of the year. Infrastructure group net revenue fell 8.4 per cent and gross revenue declined 10.2 per cent.

Sultan pointed out that the full impact of Covid-19 was not yet clear. “There are many possible scenarios and many unknowns – but we are taking steps to weather the storm and emerge stronger. We are adjusting to the reality on the ground within each respective business, and bringing the cost structure in line with the new levels of business we are seeing.”

“We have a strong focus on cash, with a view to having ample liquidity to cover us for the foreseeable future,” he added.