May 19 - According to chairman Tarek Sultan, Agility will increasingly focus on its Global Integrated Logistics (GIL) division in the face of declining profitability over the course of the next four quarters.
A company statement said that profitability is declining as a result of major US government contracts winding down in Iraq, recovery from the global recession, and the financial impact of the legal dispute with the US government.
Overall, net profit for 2009 was KD 156.4 million (USD 537.6), up 10.6 percent over 2008 levels. Agility said that this slight increase was due to several factors including new revenue and profits from network expansion into Brazil, Mexico, as well as new government contracts outside the Middle East
For the first quarter 2010 overall revenue is KD 403 million (USD 1385), a decline of KD 67.7 million (USD 232.7) or 14.4 percent compared to Q4 2009. Revenue in Q1 2010 is KD 403 million.
GIL revenue decreased by 5.8 percent or KD 17.4 million (USD 58.4) in Q1 of 2010 when compared to Q4 of 2009. GIL revenues now stand at KD 279.4 million (USD 960.4). This is primarily due to typical seasonality witnessed in commercial logistics when comparing fourth quarter revenues to the current quarter. Nevertheless, underlying business in GIL has grown compared to Q1 2009. Revenues compared to Q1 2009 are 14 percent higher.
Agillity said that, realistically, 2010 will be a year of transition and the company is likely to face declining profitability over the course of the next four quarters.
The relative importance of the GIL business has grown in the face of uncertainty around DGS. GIL will continue to focus on growth centered around a tradelane development program and on growing business with global accounts., whilst controlling overhead costs, maximising returns on assets, and managing cash.