Makhazen (MKHZN) Earnings Call Transcript & Summary

Hello, everyone, and thank you for joining us on today's Agility Public Warehousing Q1 2025 Earnings Webcast. My name is Drew, and I'll be the operator on today's call. [Operator Instructions]. It's now my pleasure to hand over to Aly Adel to begin. Please go ahead when you're ready.

Thank you. Good morning, good afternoon, ladies and gentlemen, and thank you for joining us today. This is Aly Adel and on behalf of Arqaam Capital, I would like to welcome you all to the Agility Public Warehousing Q1 2025 Earnings Call. So without any further delay, I will now turn over the call to the management team. Please go ahead.

Thank you, Aly, and welcome, everyone, to Agility's Q1 '25 Earnings Webcast. Today, we will be presenting to you Agility's financial and operational performance during Q1 of 2025. And Khadija will also be addressing your questions towards the end of the session, as was previously mentioned. If you have any questions, please type it in the chat box, and we will answer it towards the end of the session. And before I hand it over to Khadija, I would like to draw your attention to the disclaimer on the second page of this presentation. You can take a moment to read it, and then I'll hand it over to Khadija to start the presentation. Thank you.

Good afternoon, everyone, and thank you for joining Agility KSCP Quarter 1 2025 Earnings Call. I am Khadija Obla, the CFO for Agility KSCP. Today, I'll walk you through our financial highlights for the quarter and share insights into the key drivers behind our performance. After the presentation, we'll open the floor for your questions. The group revenue grew by 16% year-on-year, driven primarily by the robust performance of Agility Global, which continues to excel across all its business lines. Our cash flow -- free cash flow for the quarter reached KWD 122 million, reflecting healthy operating performance and disciplined capital allocation. I'm also pleased to announce that the AGM held earlier today approved the KWD 0.010 per share cash dividend for the full year 2024. This decision underlines our strong financial position, confidence in our long-term strategy and commitment to delivering value to our shareholders. With that overview in place, let's delve into the financials, starting with the income statement. Q1 2025 demonstrated stable performance with notable underlying developments. Revenue reached KWD 389 million, reflecting a strong 16% year-over-year growth, supported primarily by Agility Global's performance across its portfolio. The net revenue rose to KWD 247 million, an increase of 11% compared to the same period last year. EBITDA came in at KWD 68 million, remaining broadly in line with last year's first quarter. And net profit for the quarter was KWD 12 million, representing a 37% decline year-over-year. However, this decline primarily results from the reallocation of earnings to minority interests. While we continue to consolidate Agility Global, only 51% of its earnings are now reflected in the bottom line, making year-on-year comparison less straightforward. Let's now turn to the balance sheet to review our financial position as of March 31, 2025. Total assets stood at KWD 4.1 billion, reflecting a 9% increase compared to March 2024. This growth was driven by KWD 199 million increase in noncurrent assets, primarily due to mark-to-market gains on financial instruments and long-term investments. Current assets rose by KWD 141 million, driven by a stronger cash position and an improved working capital performance, particularly from Agility Global. Total liabilities declined by KWD 561 million, a 20% reduction, mainly due to the reclassification and timing differences in financial instruments. On the noncurrent liability front, there was a moderate 7% increase driven by FX translation impact on foreign currency obligation and the normal -- which basically stem from the normal course of long-term financing. Equity reflects the ongoing structural changes in the group. Minority interest increased to KWD 1.04 billion, up from KWD 124 million last year, reflecting our reduced ownership stake in Agility Global from 100% to 51%. Equity attributable to Agility KSCP shareholders stands at KWD 984 million, marking a modest 4% increase of KWD 36 million. Overall, the group's balance sheet remains strong with healthy liquidity, disciplined leverage and a solid capital base that continues to support our growth trajectory. Turning to cash flow and capital deployment for the first quarter. We generated KWD 64 million in operating profit before changes in working capital, which aligns closely with EBITDA and underscores solid performance operationally across the portfolio. Working capital had a minor negative impact of KWD 5 million this quarter, driven by timing impacts in collections and payable in few entities. These movements are not structural and remain within our expected range. After accounting for taxes and other recurring outflow, net cash from operating activities stood at KWD 56 million. On the investing side, net cash outflows totaled KWD 66 million, reflecting our capital expenditure and strategic investments. As a reminder, this is a gross figure, and it doesn't necessarily compare to last year. This brings free cash flow to KWD 122 million, a healthy position that underscores strong cash generation, balanced capital deployment and disciplined spending. Finally, net CapEx stood at 4.1% of revenue, in line with our plan and the scale of ongoing initiatives across the group. If you look at the bar chart on the right, you will see the breakdown of our total investment activity for the quarter. 75% of our outflow were directed towards financing and strategic investments, while 25% went to operational CapEx. While the composition appears to have shifted compared to 2024 first quarter of last year, it's important to highlight that these figures reflect that the larger -- basically share of this outflow is largely due to a onetime financing transaction. And if we adjust for that, the CapEx remained broadly in line with historic trends. So to conclude, Agility KSCP delivered steady performance in Q1 2025. Group revenue grew 16% year-over-year, supported by broad-based momentum across the business line. Our balance sheet remains healthy. Total assets reached KWD 4.2 billion, 9% improvement. Liabilities decreased by 20% and the parent equity stood at KWD 983 million, 4% year-on-year improvement as well. Free cash flow stood at KWD 122 million for the quarter, supported by solid operating performance and disciplined capital allocation. The AGM approved a KWD 0.010 per share dividend, which underscores confidence in our strategic trajectory and ability to continue delivering shareholders' value. Thank you for your attention. We now welcome your questions. Please give us a few minutes as we connect to the questions platform.

[Operator Instructions]. It looks like we have no questions registered at this time. So I'll hand back over to Aly for closing remarks.

Okay. Thank you so much, everyone, attending today. That does conclude today's call.

That concludes today's call. You may now disconnect your lines.