KUWAIT CITY, April 2: An indictment against Agility DGS Holdings Inc, a US affiliate of Agility, has been dismissed without prejudice by a US District Court in Atlanta. Agility and one of its Kuwait affiliates, remain the subjects of a legal action by the US Department of Justice.
Meanwhile, the Board of Directors met and approved a dividend distribution of 40% (40 fils per share) for the year ending 2010.
Agility also reported a net profit of KD 25.11 million and 24.92 fils earnings per share for the full year 2010 which included net non operating adjustment of KD 20.33 million. The adjusted net profit stood at KD 45.44 million for the full year 2010.

“The results are in line with our expectations. We moved aggressively to reduce overhead, improve efficiency through streamlining and standardizing processes, strengthen the balance sheet and ensure that our core commercial business is more disciplined about costs and better focused on customers,” said Tarek Sultan, Agility Chairman and Managing Director. “We knew profits would be hurt by the loss of US government contracts and the reorganization. Our priority is to position the commercial business for sustained growth.”
“We improved our cost structure, financial position and processes,” Sultan said. “Our fourth quarter results is not representative of our future ongoing operations. It was impacted by non operating adjustments and with winding down costs primarily driven by lost government contracts. Some work remains to be done, but what we expect going forward is improved profitability. And this year being a revised base year for the company. There is still more work to be done, however we are on the right path to transition the business to better serve our commercial customers.”

Financial Highlights
4th Quarter 2010
n Agility revenues for the 4th quarter 2010 were KD 369 million a 21.7% decrease from same period last year. The main driver of this decline was from DGS business of KD 173 million offset by a top-line growth of our commercial business by KD 17 million due to the increase in freight volumes across all trade lanes.
n Agility net revenue margin for the fourth quarter was 27.4% .
n Operating profit stood at KD -22.52 million which is 153% decrease from same period last year mainly on account of the onetime net non operating adjustments and winding down costs primarily driven by lost government contracts.
n For the fourth quarter of 2010 net profit stood at KD - 24.46 million which compares with a net profit of KD 40.87 million for the 4th quarter of 2009.

Full Year 2010
n Agility revenues for the FY 2010 were KD 1.6 billion, a decrease of 6% from KD 1.7 billion in the same period in 2009. This decrease in mainly attributed to the winding down of government contracts representing KD 322 million whereas GIL grew by KD 173 million.
n GIL revenue was 1.2 billion KD, a 17% increase from KD 1.04 billion a year earlier. As a result of higher volumes, new customer wins and upturn of the global economic activity, however, the group experienced 8% decline in net revenue as margins throughout the logistics industry came under pressure from increased price competition.
n DGS revenue fell to KD 393 million, a 45% decrease from KD 715 million for the full year 2009.
n Infrastructure revenue was KD 81 million compared with KD 72 million a year earlier, an 11% increase from 2009.
n Operating profit fell 81% to KD 32.24 million vs. KD 168.81 million in 2009 mainly as a result of the decline of the government business which drove the decline in Net revenues.
n Net profit stood at KD 25.11 million, 84% decrease from 156.43 million during 2009. This resulted in an EPS of 24.92 fils compared to 155.90 fils a year before.
n Adjusted for net non operating adjustments, 2010 adjusted net profit stood at KD 45.44 million.
n Agility enjoys a healthy balance sheet with low leverage and net cash position of KD 75 million.
n Our free cash flow that stands at KD 155 million an increase of 11% from last year.

Legal Dispute Update
Agility’s dialogue with the US Department of Justice is ongoing. The company is committed to trying to resolve the dispute involving its work as supplier of food to US troops in Iraq and Kuwait from 2003 to 2010. The company believes the matter should be a civil contract dispute rather than a criminal matter. Agility remains hopeful that a mutually agreeable resolution is possible, but the company is prepared to defend itself it dialogue with the Justice Department is not fruitful.

Forward View
“We’ve gotten leaner and more efficient across the board. We made structural adjustments and imposed greater financial and operational discipline. We realigned incentives to match key performance benchmarks and implemented operational changes that will strengthen branches throughout our network,” Sultan said. “The result is a more streamlined, focused company that is positioned to grow this year then accelerate growth after 2011.”