Agility, the Kuwait-based logistics group which is in dispute with the US government, has reported a 5.1 per cent increase in operating profit to 168.8m Kuwaiti Dinars (£383m) despite a 7.1 per cent drop in sales.
Last week Agility asked the Kuwait Stock Exchange to suspend trading in its shares and to delay the release of the full-year 2009 financial results “pending a determination by the company about whether or not it can resolve a legal dispute with the US government”.
The company is accused of overcharging the US military on contracts in Kuwait, Iraq and Jordan and it has been reported that the US government could be looking for up to $750m in compensation.
In its results, Agility said: “PWC continues its discussions with the US government with the view to resolving the current legal cases with the US Department of Justice. However, there is no guarantee that the parties can reach a mutually agreeable settlement.
“Due to the inherent uncertainty surrounding the US Department of Justice lawsuit against the group, no provision is considered in the accompanying consolidated numbers.”
Agility’s commercial logistics business group, Global Integrated Logistics, faced the brunt of the economic downturn, the group said, “yet performed reasonably well under challenging marketing conditions. As the economic recovery in 2010 will be uneven, GIL will continue to manage the business with a combination of cost control and growth initiatives.”
Chairman and managing director Tarek Sultan said: “2009 was a mixed year for Agility. On one hand, the company was able to report solid operational profits, continue to grow its emerging market footprint, and attract a number of important new customers around the world.
“This is particularly significant given a global financial crisis that hit the logistics industry hard overall. On the other hand, Agility is facing a number of challenges, including the slower than expected recovery from the global economic recession, the troop drawdown in Iraq, and the ongoing legal issues.
“I see these challenges as a catalyst for change and an opportunity to build a new discipline and emerge as a more flexible, efficient and competitive Agility.”
