Agility reports 2008 results

Revenue rose 10% to KD1.84bn, compared with KD1.67bn in 2007. Agility reported a robust net profit KD141m or 138fils per share, with operating profits of KD161m.

"We are proud of the quality of profits which stems from Agility's focus and determination in growing its core operations." said Tarek Sultan, Chairman and Managing Director of Agility. "Even though we began to feel the impact of the global economic crisis in our commercial business in the fourth quarter of 2008 as world trade volumes slowed; Agility was able to achieve strong profits which helped enhance our balance sheet position."

"In order to capitalize on opportunities emanating from the global financial crisis and to position Agility as the preeminent supply chain partner for commercial and public sector entities, the Board of Directors is recommending to shareholders that no dividends be paid for the fiscal year 2008. Agility believes that the ongoing financial crisis has created unique opportunities for forging new partnerships and acquiring assets on the basis of attractive and previously unobtainable business terms." he added.

Sultan further emphasized, "We look to come out of the global downturn stronger than ever. We have an excellent cash position, healthy debt profile, a diversified customer base and an established footprint in the emerging markets that offer the most potential for future growth."

Strong Balance Sheet Position and Healthy net debt levels

Agility's asset base grew 7% in 2008 to KD1.64bn. The company borrowed approximately KD220m from international and regional banks, using the funds to pay down short-term debt and extend the maturity of remaining debt. As a result, over 60% of Agility's debt is due after 2010, a strong position in the current credit environment.

"We are actively managing our cash position to offset our outstanding debt balance; to achieve a position of zero net debt; and maintain an enviable level of financial flexibility during these times of turmoil. As of year-end 2008; we have a healthy cash flow from core operations and a cash balance KD253m. We believe our strong focus on our core business will ensure continued growth," Sultan said.

Global Integrated Logistics (GIL)

GIL accounted for 59% of Agility's revenue in 2008. Its revenue rose 11% year on year. Revenue from continuing operations rose 12%; the remaining increase came from new acquisitions. GIL focused on growing its network, acquiring new customers, optimizing costs and putting business-transformation initiatives in place.

GIL expanded its European network through acquisitions, establishing offices in Austria, Slovenia, Poland, Hungary, Denmark and Finland. Through GIL, Agility invested in Algeria, Libya, Morocco and the Kurdish region of Iraq, and continued to develop its third-party logistics (3PL) capabilities throughout the Middle East and Africa. The company sought to expand its presence and capabilities in China and acquired Shenzhen-based ocean freight forwarder COSA Freight and purchased Shanghai-based logistics provider Baisui Logistics in order to serve the growing Chinese domestic market.

GIL won important new business from Nokia, Siemens, Cadbury, Emerson, Flextronics and others. It continued to demonstrate strength in the segment serving mid-size customers. The company's work was singled out for industry recognition on several occasions:
• Best Logistics Company - Lloyd's List Asia
• Best European 3PL for Pharma, Chemicals, HazMat Transportation - eyefortransport
• Supply Chain Innovation Award - Supply Chain Asia
• GIL's Fairs & Events USA unit was voted 'Best On-Site Agent' by International Exhibition Logistics Associates (IELA). IELA voted Fairs & Events UK 'Best Export Agent.

Defense & Government Services (DGS)

DGS contributed 37% of Agility's overall revenue. DGS revenue grew about 7% from the previous year. DGS focused on diversifying its customer base, regional reach and lines of business. It achieved an estimated 20% growth in business from new customers, including the United Nations, U.S. Department of State, U.S. Marine Corps, U.S. Defense Energy Support Center and U.S. Defense Supply Center Columbus.

DGS experienced record growth in its Commodities Services business and positioned itself for further growth by winning:
• A $223m Industrial Prime Vendor contract to supply and deliver repair parts for communications and electronics equipment at the Tobyhanna Army Depot in Pennsylvania.
• Contracts to manage bulk fuel supplies at U.S. Air Force installations in Portugal, Germany, Turkey, Japan, South Korea and Guam.
• A $140m contract to manage and distribute personal gear at all 19 U.S. Marines Corps bases worldwide.

DGS's aggressive efforts to capture new customers, move into new regions and diversify its business are intended to ensure continued growth despite the drawdown of U.S. forces in Iraq. Through its Defense Reutilization and Marketing Service (DRMS) contract, DGS is poised to deliver reverse logistics services for the U.S. military as it removes, repositions and disposes of equipment and materiel.

In 2008, DGS delivered operational excellence and customer service that prompted existing customers to exercise options on all key contracts: the Subsistence Prime Vendor food contract for Iraq and Kuwait; the Defense Distribution Depot Kuwait, Southwest Asia (DDKS); and the Heavy Lift VI contract to move supplies and equipment in and out of Iraq.

Customers singled out DGS for industry recognition:
• The Army Air Force Exchange Service presented DGS with the Logistics Exceptional Service Award.
• National Industries for the Blind selected DGS for its Partner in Excellence Award.
• The National Defense Transportation Association gave DGS its Distinguished Service Award.

Infrastructure

Agility Investments was renamed Agility Infrastructure to reflect a development of our strategy and financing constraints that affected our private equity group, Alcazar, and private equity worldwide.

Our Infrastructure Group companies are primarily focused on emerging market opportunities in the Middle East, Africa and South Asia. One of the core strengths of our Infrastructure group is our Real Estate (RE) platform, which manages industrial real estate assets worth more than $1bn. Rental revenue grew 11%, to KD25.9m in 2008, as a result of efforts to develop and renovate more properties, offer value-added services and increased occupancy. RE focus in 2009 will be to continue to acquire customers and increase its market share.

Agility's Infrastructure Group also includes the Metal and Recycling Company (MRC) which serves industrial, commercial and governmental clients in the Middle East with waste management, scrap trading, and recycling solutions; Global Clearinghouse Systems (GCS) which is a joint venture with the Kuwait General Administration for Customs (KGAC), to modernize, optimize and support Kuwait customs operations for a period of twenty-five years; and National Aviation Services (NAS).

NAS is an airline ground handling company providing ground support, passenger handling, cargo management, engineering, and lounge services. NAS currently operates in Kuwait, Jordan, and India. In Kuwait NAS won new client contracts, including Delta Airlines, Bahrain Air and Royal Jordanian. NAS India has also won the MIAL tender, to provide ground handling services at Mumbai International, an airport with 27 million passengers annually.