Tuesday, November 15, 2011

Freight and Logistics Giant Battles the Loss of US Government Works

Q3 Figures for Agility Group Published
Shipping News Feature

KUWAIT – US - WORLDWIDE – As is evidenced by the generally poor third quarter figures published recently the freight and logistics sector has been unsurprisingly damaged by the global economic slowdown but some shipping groups have had to face potentially more serious problems in the past financial year such as in the case of Agility. The freight forwarder and supply chain specialists suffered the acrimonious loss of US government business as we reported in an ongoing saga which can be tracked back through our previous stories.

The problems engendered by that case caused Kuwait based Agility to launch a separate website to put its own arguments and the collateral damage in the form of lawsuits is liable to continue for some time to come. Additionally the freight group faced a fine of NZ$ 2.5 million last December for anti trust practices which it engaged in with others during its previous incarnation as Geologistics.

Now Agility has revealed its own Q3 figures and despite all the problems the group has published profits for the period of just under $30 million (£18.4 million). Revenue and net profit fell by 19% and 42%, respectively, whilst operating profit dropped 71% from the same period last year mainly as a the result of the lost defence and government business. The results have however been adjusted to reflect changes to establish a new financial baseline set at the start of 2011. Whilst military contracts have of course collapsed Agility Global Integrated Logistics has picked up new contracts and, for the full nine months of 2011, GIL revenues excluding military contracts have increased by 2.2%.

Revenue for Agility Global Integrated Logistics (GIL) in the third quarter of 2011 was $1.08 billion (£680 million) and we have reported before on some of the notable contracts Agility have signed this past year including supply chain deals with Colgate Palmolive, Henkel and Nokia plus the fact the group has made the effort with various humanitarian aid projects, assisting in Haiti and East Africa and with the World Food Programme.

The Q3 figures show Agility’s Infrastructure companies contributed over $141 million to the total revenue, up 2% year on year excluding government-related business, principally due to the real estate contribution. Tarek Sultan, Chairman and Managing Director of Agility commented:

"Overall, we are making steady progress in 2011. That said, all signs point to challenging conditions in the global economy as we move towards 2012. We will thus continue to exercise discipline in our cost structure and cash management, as we simultaneously move forward with our growth and transformation strategy.

"Agility will continue to act aggressively to grow revenue organically, improve return on investment, manage working capital and cash, and strengthen yields on core operating assets. We will also continue to transform our operations and streamline our organization, structure, and processes in order to get leaner and gain efficiencies. Despite uncertainty in global markets, we believe these actions, in conjunction with the investments we have made in fast-growing emerging markets, will continue to position us for future growth and success."