Wednesday 26th Oct 2016 - Logistics Manager

Profits fall as Agility shifts focus to commercial logistics

Agility saw its operating profit fall 91 per cent last year to 1.68 million Kuwaiti Dinars (£3.72m) in the first quarter on sales down 21 per cent to 318.5m KD (£705m).

As government contracts largely wound down at the end of 2010, Agility restructured and reduced its Defense & Government Services business.

The company is currently involved in a 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.

The case has been rumbling on through the US courts since then. Commenting on a ruling in the US District Court in March of this year, Agility said it was disappointed with a decision by the court to overturn the conclusions reached in the 93-page report and recommendation of a US Magistrate Judge and it was reviewing its legal options.

“The company continues to believe this case involves a civil contract dispute and should not be a criminal matter. Agility’s prices, suppliers and business practices were disclosed to, approved and routinely reviewed by its U.S. government customer.”

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 286m KD (£633m).

Tarek Sultan, Agility’s chairman and managing director, said: “After a year of adjustment in 2010, which included a transition away from government business, 2011 represents a new financial benchmark for Agility.”

“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 enter 2011 with both a clear understanding of where we need to go as a company and deep determination to achieve our goals.”
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