Agility's profit falls 9% on expansion costs

Kuwait City: Kuwait's Agility, the Gulf's biggest logistics provider by market value, posted a nine per cent decline in second-quarter net profit as it is expanding abroad to reduce reliance on US Army deals.

Agility, which is in the midst of launching a 120 million dinars ($447.1 million) rights issue, saw quarterly net profit slip to 35.1 million dinars from 38.6 million dinars a year ago.

Global Investment House had forecast second-quarter net profit of 40.90 million dinars, according to a Reuters survey in June.

Agility did not say why the profit fell in a brief statement on the Kuwait bourse website. An Agility spokeswoman said a detailed statement would be released tomorrow.

Bikash Rout, senior financial analyst at Global, said possibly a decline in revenues from US government deals to supply troops in Iraq and rising acquisition costs were behind the profit decline.

"I doubt they will maintain their [2007] full-year figure," Rout said, speaking of profit expectations for this year.

In 2007 net profit fell by 7.6 per cent to 153.9 million dinars.

Agility shares have fallen more than seven per cent this year on investors worries about its profitability, underperforming the Kuwait stock market gaining more than 16 per cent.

Agility has been trying to reduce heavy reliance on US government contracts to supply troops in Iraq and Afghanistan.