Agility Profit Plunges on Lost Government Contracts

Agility’s third-quarter profit plummeted 42 percent year-over-year to $29.2 million, as the global logistics group’s revenue contracted 19 percent on a loss of defense and government contracts.

The Kuwait-based company’s revenue fell to $1.2 billion, while operating profit declined 71 percent year-over-year to $16.6 million. Agility, which is facing U.S. fraud charges, said its core logistics business was also hurt by market volatility and softening volumes.

“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,” said Agility Chairman Tarek Sultan.

Agility said its investments in developing markets sharpened its competitive edge and boosted revenue amid economic uncertainty and lower trade volumes.

Recent deals include a five-year contract with Germany’s Henkel to be the exclusive logistics partner in China for the homecare, cosmetics and adhesive manufactuer. Agility also signed five-year contract with Colgate-Palmolive to manage its third-party logistics warehousing and supply chain at Agility’s multi-user facilities in Karachi, Lahore, and Islamabad in Pakistan.

Agility also launched an initiative with Finnish mobile phone company Nokia to use technology to reduce transport costs, end-to-end transit times and carbon emissions on shipments from Hong Kong and China during the fourth quarter.

Agility, the largest supplier to the U.S. Army during the Iraq war, pleaded not guilty in August to charges it defrauded the U.S. government over multi-billion dollar contracts.

-- Contact Bruce Barnard at brucebarnard47@hotmail.com.