Financial Highlights

Figures in the table above have been rounded

Third Quarter Results

Agility (AGLTY) today announced financial results for the third quarter of 2010. The company reported a net profit of KD 13.89 million for the third quarter of 2010 and an EPS of 13.79 fils per share, a decrease of 23.20% and 23.22% respectively from the second quarter of 2010. Revenues stand at KD 405.87 million, a 5.19% decrease over the second quarter of 2010.  

This expected decrease in profitability and revenue is attributable to the challenges facing Agility’s Defense 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 our 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.”

Update on the Business

Agility’s core business is now focused on commercial customers.

Agility Global Integrated Logistics revenues increased by 26% in Q3 of 2010 relative to Q3 of 2009. 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 and going above and beyond for customers.   

As reported throughout the year, Agility Defense 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 is almost flat when compared to Q2 of 2010, but shows a 7% 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.

Recapping Financial Performance

·         Agility’s revenue in the third quarter of 2010 stands at KD 405.87 million, a 5.19% decrease over Q2 of 2010

·         Agility Global Integrated Logistics revenue in Q3 of 2010 stands at KD 310.7 million, a 26% increase over the same quarter in 2009. Agility will continue to report year-on year comparisons for the commercial business due to the seasonality of the business.

·         Agility Defense and Government Services revenues for the third quarter of 2010 stand at KD 92.40 million, a 26.4% decrease compared to Q2 of 2010.

·         Agility Infrastructure companies contributed KD 20 million to total revenue, almost flat when compared to Q2 of 2010. Real estate the largest business within infrastructure reported revenues of KD 8.16 million for the third quarter of 2010, an increase of 26% compared to the second quarter 2010.

·         Operating profits are KD 15 million in the third quarter of 2010, a 27.33% decrease since Q2 of 2010.

·         Net profit is KD 13.89 million in the third quarter of 2010, as compared to KD 18.09 million for Q2 2010.  This results in Earnings Per Share of 13.79 fils for this quarter, compared to an EPS of 17.96 fils in Q2 2010.

Forward View

“Although Agility has faced challenges this year, we have been proactive about adjusting our structure, financial goals, and processes to adapt to the changes in our business,” said Sultan. “Internally, we are continuing to focus on being leaner and more efficient. We are committed to a strategy to grow revenue organically, improve return on investment, manage costs and working capital prudently, and maximize yields on core operating assets.”

“Our commercial business, Global Integrated Logistics, will continue to drive the company’s growth into 2011 and beyond,” added Sultan. “Emerging market leadership continues to differentiate the company – emerging markets are where we have grown our business and emerging markets are where we have an edge over the competition. Many of our customers see their best opportunities here too, so Agility is uniquely positioned to meet their needs.”

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