Defence challenges decrease Agility profitability

Logistics company Agility company reported a net profit of US$49.26 million for the third quarter of 2010, a decrease of 23.20 percent from the second quarter of 2010.

Revenues stand at $1.43 billion, a 5.19 percent decrease over the second quarter of 2010.

This expected decrease in profitability and revenue is attributable to the challenges facing Agility’s Defence 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 the 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’s core business is now focused on commercial customers.

Agility Global Integrated Logistics revenues increased by 26 percent in the third quarter of 2010 compared with a year ago. 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 tradelane development, increasing productivity through technological transformation, and aggressive cost and cash management.

Agility GIL is differentiated by its global network and leadership in emerging markets, its specialist capabilities in project logistics, fairs and events, and chemical and fuel
logistics, and commitment to personal service.

Agility Defence and Government Services has been set back by the legal case with the US government and the ongoing troop drawdown in Iraq. Today, Agility DGS is focused on fulfilling its obligations under existing US government contracts, which largely expire at the end of this year.

Agility Infrastructure companies’ revenue was almost flat when compared to the second quarter of 2010, but shows a seven percent 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.
(Source:www.cargonewsasia.com)