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The company rebranded seven years ago and has capitalised on opportunities in emerging markets

The company rebranded seven years ago and has capitalised on opportunities in emerging markets



Agility strategises for growth

The company, unique as a top logistics player outside Western Europe or the US, has prevailed in a highly competitive environment

April 2014

Agility has launched a two-pronged drive to preserve gains and grow its business locally and overseas.

Chief Executive Officer Tarek Sultan said the first of the two fronts would focus on improving performance in the core Global Integrated Logistics (GIL) business through technology-driven transformation, ongoing focus on global accounts and field sales, and maintaining financial discipline.

The second front relates to growing individual companies within its Infrastructure portfolio, expanding their geographic reach, and diversifying their customer base.

“Our diversified business model allows us to hedge risk and take advantage of niche market segments in emerging markets, while making steady progress in improving our underlying business,” said Sultan as the company announced financial results. For full-year 2013, net profits stood at KD46.2 million ($164.1 million), or 44.28 fils per share; an increase of 37 per cent over full year 2012. Revenues and Ebitda were KD1.4 billion and KD 94.0 million, respectively.

Net profit in Q4, 2013 was KD 12.4 million, an increase of 29 per cent compared to the fourth quarter of 2012. Revenue for the quarter was KD 342.9 million, and Ebitda KD25.1 million.

Agility is keen to address the shortfall in GIL performance where revenue for 2013 was KD1.13 billion, a decrease of 4.5 per cent from 2012. Revenues declined due to underlying challenges in the freight forwarding industry, including difficult airfreight conditions and falling ocean freight rates despite increased volume. That said, GIL improved its net revenues margin from 21 per cent in 2012 to 22 per cent in 2013 by driving productivity improvement in its business.

“Going into 2014, our strategic priorities remain clear and consistent. We will continue to strengthen our sales channel strategy around global and strategic accounts and field sales, develop our trade lane programme, and further sharpen our growth strategy in our Project Logistics business,” said Sultan. The official pledged to build on the momentum gained in driving productivity improvements through technology-driven transformation, and continue to maintain financial discipline and a streamlined administrative structure. “Throughout, we will develop our people to lead against these objectives, and drive a culture of accountability across all parts of our business. The economic outlook may be uncertain, but we will continue to focus on what we can control,” said Sultan.

GIL provides supply chain solutions to meet traditional and complex customer needs. It offers air, ocean and road freight forwarding, warehousing, distribution, and specialised services in project logistics, fairs and events, and chemicals.

 

INFRASTRUCTURE PERFORMANCE

The company is a major operator across several logistics sectors

The company is a major operator across several logistics sectors

Agility’s Infrastructure companies contributed KD257.1 million to full year 2013 revenue, a 6 per cent increase over 2012. The Infrastructure group of companies manages industrial real estate and offers logistics-related services, including e-government customs optimisation and consulting, waste management and recycling, aviation and ground-handling services, support to governments and ministries of defense, remote infrastructure and life support.

Each Infrastructure business is different with its own brand, management, and way forward. Agility Real Estate, the largest contributor to the Infrastructure group, grew its revenues by 16 per cent in 2013, compared to 2012. Tristar, an integrated liquid fuels logistics company, achieved 12.5 per cent growth in 2013. National Aviation Services (NAS) and United Project for Aviation Services (UPAC) jointly achieved 14 per cent revenue growth that year.

Significant contract wins achieved by the Infrastructure companies in 2013 included GCC Services’ $320 million contract to support peacekeeping operations in Darfur, NAS’s $200 million contract to manage three airports in Afghanistan, and Tristar’s $200 million contract to support a global oil major.

“Our Infrastructure companies are important to our overall growth strategy. They are strong contributors to financial performance in their own right, and they allow us to take advantage of niche market segments in emerging markets, where the risks and rewards tend to be higher,” said Sultan. “We have seen steady year on year growth in our portfolio of companies, and we are excited by the potential of other investments we have made, like Korek, one of three telecommunication providers in Iraq, and our investment in Gulf Warehousing Company (GWC), the largest logistics player in Qatar.”

 

DRIVING CHANGE

Sultan promised to drive change in GIL business to make it a truly integrated network that performed on a par with its peers. He also pledged to continue to develop and grow the Infrastructure portfolio of companies.

“And we will stay open to opportunistic acquisitions of high-performing, cash flow-positive businesses in emerging markets that realise immediate financial value for the company,” he added.

In the seven years since the company took the Agility name and developed the brand “we look, feel and are very different  from our competition,” he observed.  “We are the only top industry player that got started outside of Western Europe or the US. Our heritage and coming-of-age was in emerging markets.”

The company has acquired more than 40 companies in less than a decade and reshaped its business after the global recession in 2008.




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