Agility 1Q down, but confident of future

Kuwait-based, global logistics provider Agility, reported a 56 per cent fall in first-quarter net profit to KD7.7 million (US$27.93 million), but expressed optimism about growth in its core business and customer base as it transitions away from a core focus on government contracts. Sales for the first three months ending 31 March were down 21 […]


Kuwait-based, global logistics provider Agility, reported a 56 per cent fall in first-quarter net profit to KD7.7 million (US$27.93 million), but expressed optimism about growth in its core business and customer base as it transitions away from a core focus on government contracts. Sales for the first three months ending 31 March were down 21 per cent to KD318.5 million. The company is involved in an ongoing legal dispute with the US government, after the US made public an indictment in November 2009 alleging that Agility overcharged and committed fraud in connection with its contracts to supply food to US troops and contractors in Iraq and Kuwait. Earlier this year, Agility expressed disappointment at a ruling in a US District Court in March to overturn the conclusions reached in the 93-page report and recommendation of a US Magistrate Judge to drop the indictment and said it was reviewing its legal options. While total sales were down in the first quarter, revenue in Agility’s commercially-focused business, Global Integrated Logistics, increased by 12.3 per cent to KD286 million. “After a year of adjustment in 2010, which included a transition away from government business, 2011 represents a new financial benchmark for Agility,” said Tarek Sultan, Agility’s chairman and managing director. “Although our results this quarter reflect costs related to the restructuring of our defence and government business, it is important to note that today we are first and foremost a commercial logistics provider.” “Our commercial business is steadily growing. We are acquiring new customers, expanding our business with existing customers, and transforming our operating platform to execute more efficiently,” said Sultan. “We also promised discipline, and we are delivering on that promise. We have reduced SG&A costs by 20.4 per cent this quarter and are continuing our efforts to streamline the organisation while improving productivity. “We enter 2011 with both a clear understanding of where we need to go as a company and deep determination to achieve our goals.”