Following publication of its first quarter
results, which revealed that revenues are down 14.4 percent to KD 67.7 million compared to the final quarter of last year, Sultan has released a statement outlining the company’s plans for the future.
In the near-term, Sultan said he expects net income to decline as Agility
prepares for a U.S. troop drawdown in Iraq that will result in the phasing-out of some of its largest government contracts
Historically, these contracts
have contributed 25-35 percent of the company’s annual revenue.
Despite having anticipated the eventual troop drawdown, Sultan explained that it did not plan for the ongoing impact of the global recession on its Global Integrated Logistics
Meanwhile, the legal proceedings by the U.S. government, which led to the suspension on winning new government business, impacted its Defense & Government Services (DGS) business.
Sultan added that Agility
will mitigate the impact of these challenges through aggressive cash management, although it is likely to experience declining profitability over the next four quarters.
Already in the first quarter
, operating expenses were down KD 9 million than in the fourth quarter 2009, due to its cost-containment efforts and initiatives to reduce overhead expenses.
“Global Integrated Logistics
(GIL) will strengthen its focus on managing working capital – we have already made significant investments in building a global platform in the past, and we now seek to achieve ‘superior’ returns on that investment,” said Sultan.
“Although we are facing challenges, I see them as a catalyst for change. I believe that with a commitment to discipline, Agility
will emerge stronger, more flexible, and more competitive.”
Edited by Jennifer Denby