Agility's first quarter net profit drops 52%

Net profit at Agility more than halved in the first quarter and the Gulf's biggest logistics provider said future earnings would suffer from legal costs and lost contracts following fraud charges.

Net profit in the three months to March 31 was $60.72 million, down 52 percent compared with $127.2 million in the same period a year earlier, Reuters reported.

The firm has been accused of overcharging the US Army over 41 months under contracts to supply US$8.5 billion of food to troops in Iraq, Kuwait and Jordan.

"Agility is likely to face declining profitability over the course of the next four quarters, 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," the firm said.

Agility added that 2010 will be the final option year for US government contracts, which have contributed up to 35 percent to the firm's annual revenues.

(Source: Cargo News Asia)