Agility hit by US Defense business problems
Agility's third quarter results have been hit by the challenges facing Agility's Defense and Government Services (DGS) business as its major US government contracts wind down.¬†
The company reported a net profit of KD13.89m for the third quarter of 2010, a decrease of 23.20% from the second quarter of 2010. Revenues stand at KD405.87m, a 5.19% decrease over the second quarter of 2010.¬†
This expected decrease in profitability and revenue is attributable to the challenges facing Agility's Defense and Government Services (DGS) business as major US government contracts wind down and the company is unable to replace them with new government business due to the legal case with the US government. However, the impact to Agility DGS has been offset by positive growth in its commercial business, Agility Global Integrated Logistics (GIL).¬†
"2010 has been a year of transition for Agility. We have reoriented our business to focus on commercial customers over the course of the year, and we have taken steps to right-size the business to reduce cost and improve efficiency, while building on the company's strong and unique foundation," said Tarek Sultan, Agility's Chairman and Managing Director. "Although we anticipate continued challenges through the middle of 2011, we believe that with a renewed commitment to discipline, we will emerge as a stronger and more flexible company."¬†Agility Global Integrated Logistics revenues increased by 26% in Q3 of 2010 relative to Q3 of 2009. Growth figures were driven by global recovery in demand for logistics services, as well as continued progress in GIL's strategy of growing through global accounts and trade lane development and increasing productivity through technological transformation. Agility Infrastructure companies' revenue is almost flat when compared to Q2 of 2010, but shows a 7% increase over the same quarter of last year. Agility Infrastructure has consistently shown healthy growth in the base business over the course of the last several years.