- Net profit before non-recurring items rises 16.4% and 16.7% compared to 1Q 2008 and 4Q 2008 respectively
- Adjusted Earnings per share stood at 39.15 fils; an increase of 21.7% and 19.3% compared to 1Q 2008 and 4Q 2008 respectively
- Strong cash position of KD 323.1 mln and favorable net debt position of KD107.3 mln
- Cash from operations stood at KD 81.1 mln, an increase of 25% over the previous period

Kuwait - Agility (AGLTY) today announced financial results for the first quarter 2009, reporting strong performance despite the slowdown affecting the global economy. Net profit before non-recurring items was KD 39.2 mln – or 39.15 fils per share -- a gain of 16.4% over the same period a year ago.  Operating profits befor e non-recurring items also increased by 12.8% compared to 1Q 2008.

Tarek Sultan, Chairman and Managing Director of Agility, said: “The growth in our operating profits (before non-recurring items) is a testament to our transformation; which has enabled us to expand our net revenue margin; and our ability to control operating expenses.  Our strategy of diversified but complementary businesses has also been able to generate healthy results for our shareholders during this global recession as we have increased our cash from operations by 25% over the previous period.”

First quarter net revenue margin increased to 37.9% from 34.1% compared to the same period last year, despite a decline in revenues by 8.1% reaching KD 407.4 million.  

“With the net revenue margin expansion and the containment of operating expenses; we have been able to reach a strong operating profit (before non-recurring items) of KD 43.7 million up 12.8% from KD 38.7 million in 2008.”  Sultan highlighted.  “We are closely monitoring our cash; selectively investing our capital; and rationalizing costs to ensure we emerge from this crisis as a stronger player globally. Going forward, we are proceeding with extreme caution, and will continue to center our efforts on aggressively managing cost and cash while driving performance. We also continue to scope out game changing opportunities for mergers and acquisitions.”  

Global Integrated Logistics: Operational transformation allows for margin expansion despite slowing trade volume

The commercial logistics industry has been seriously affected by the financial crisis, seeing 20-30% drops in volumes on an average. The decline in volume has led to a 13.8% decrease in revenue for Agility’s Global Integrated Logistics (GIL) group, which posted first quarter revenue of KD 244.8 million vs. KD 283.9 million in the first quarter of 2008. Despite the decline in top-line performance of our commercial business, GIL’s net revenue margin increased to 31% as a result of our ability to reduce costs by procuring at competitive rates through major suppliers.

In addition, GIL’s operating platform relative to the same time last year has improved as a result of organizational transformation efforts, aggressive cost-management and an ability to free up cash by improving net working capital .

Defense and Government Services: Operating performance combines with regional and customer diversification to generate strong results

The Agility Defense and Government Services (DGS) group has been relatively unaffected by the financial crisis. DGS witnessed an increase in revenues of 3.4% from KD 168.8 million in 2008 to 174.6 million in 2009. DGS continues to diversify its government contracting business by region, customer, and service line.  DGS’s strong operational performance is underscored by a number of new contract wins during the first quarter of 2009.  These included a contract to supply and deliver repair parts for communications and electronics equipment at the Tobyhanna Army Depot in Pennsylvania, a KD 1.5M (USD $5M) Army & Air Force Exchange Service contract to provide airfreight pick-up and delivery services for (AAFES) stores in Iraq and the preliminary notice to invoke the third (final) option for the Subsistence Prime Vendor contract.

Infrastructure: Focus of long-term government spend

Despite the financial crisis, Agility’s Infrastructure group continues to be the focus of long-term government investment and stimulus spending. Infrastructure revenues experienced an increase of 6.7% from KD 17.3 million in 2008 to KD 18.5 million. Real Estate, the biggest portion of the division, experienced a revenue increase of 16.2% from KD 6.5 million in 2008 to KD 7.5 million.

“All through the global recession, we have remained focused on delivering to our customers in spite of market conditions.  We have continued to maintain a healthy balance sheet and strong financial position while focusing on driving sustainable financial results,” Sultan emphasized. “While it’s difficult to do any forecasting these days, we are confident that the measures we are taking today will be fruitful and we will be strengthened by this crisis.  Our investment in emerging markets is also proving beneficial as our presence in these markets has helped hedge the risks of an economic downturn and strategically positioned us to play an even bigger role in the post-crisis world.”