Kuwait-based Agility Group will be gearing up for acquisitions and new investments in warehousing and industrial facilities across the Middle East and Africa to pursue growth in 2019.
“Agility will be exploring different avenues for unlocking and maximising value for its shareholders, including investments, acquisitions, and public offerings of certain businesses in its portfolio,” Agility vice chairman and CEO Tarek Sultan said while announcing the company’s annual results for 2018.
The group, it may be recalled, is in discussions with leading Swiss logistics group Panalpina about partnership opportunities between the logistics businesses of the two companies.
Headquartered in Basel, Switzerland, Panalpina is a leading provider of forwarding and logistics services besides specialising in intercontinental air and ocean freight and associated supply chain management.
It operates a network of some 500 branches in more than 80 countries employing 15,000 people worldwide. Hubs of Panalpina are situated in Luxembourg, at Findel Airport, Prague and in Huntsville, Alabama, at Huntsville International Airport.
Confirming the ongoing talks, Agility said it was always exploring opportunities to grow its business and maximise shareholder value. However, the company stated that no agreement had yet been reached and there were no guarantees that a deal will be reached soon.
Panalpina ended the year 2018 with a historic record in air freight volumes of 1m tonnes – up 4 per cent since last one year. The international freight forwarding and logistics company reported earnings before interest and tax (Ebit) increased by 15 per cent to CHF 118.4 million ($119 million) from CHF 103.3 million and profits improved by 32 per cent to CHF 75.7 million from CHF 57.5 million.
Agility reported a 2018 net profit of KD81.1 million ($266 million), registering an increase of 18.4 per cent from the previous year. Its revenue for the year surged to KD1.55 billion, and Ebitda was put at KD154.8 million, thus registering increases of 10.2 per cent and 14.5 per cent, respectively.
A major player in the region, Agility’s primary business is commercial logistics. Its commercial arm, Agility Global Integrated Logistics (GIL), is headquartered in Sulaibiya, Kuwait. Agility GIL manages the shipment and delivery of finished goods, parts, raw materials and other cargo by sea, air, road or a combination.
Agility GIL revenue grew 8.6 per cent to KD1.15 billion in 2018, driven by strong growth across core products. Net revenue also grew by 4.9 per cent year-over-year, with 22.9 per cent net revenue margins, as a result of better air freight yields and stable ocean freight yields. Full year Ebitda rose 6.3 per cent to KD35.9 million, attributable to strength in freight forwarding and contract logistics, consistent execution of GIL’s commercial strategy, and management’s focus on efficiency.
The Kuwaiti group’s other businesses include commercial and industrial real estate management and ground handling and airport services. Agility, which boasts 500 offices in 100 countries, has more than 22,000 employees working for the company.
A merger between the two would give Agility significantly expanded global reach, especially in the air freight sector, where Panalpina has a very strong offering with its own 747 freighter and several aircraft on long-term wet lease charters.
For Panalpina, the tie-up would give it an unrivalled Middle East network, combining its hubs at Dubai International, DWC and Jebel Ali with the 13 DCs and offices that Agility has in the UAE alone, as well as on-the-ground facilities in 15 other countries in the Mena region.
Sultan said the company continues to invest in its future by building more than 1 million sq m of new warehousing and industrial facilities across the Middle East and Africa; building, through one its subsidiaries, the $1.2 billion Reem Mall mega project in Abu Dhabi; and investing more than $100 million in Shipa, its digital logistics platform.
Sultan pointed out that Agility remained committed to achieving its target of $800 million Ebitda. However, the timeline may be stretched beyond 2020.
Earlier, the company signed a memorandum of understanding to manage logistics at Carbon Holdings’ industrial facilities in Egypt, including construction of the new Tahrir Petrochemicals Complex (TPC).
Agility will work with Carbon Holdings, a midstream and downstream petrochemical and process industrial plant company, to transport plastic by-products within Egypt and to customers abroad.
It will also handle the distribution of chemical compounds, including low-density ammonium nitrate inside Egypt and the onward distribution to container ports for Carbon Holdings’ Egypt Hydrocarbon Corporation (EHC) business.
