Growing pains

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Tarek Sultan, Agility.

Agility chairman and managing director Tarek Sultan tells Andrew White how the firm plans to expand throughout Asia and Africa, despite the pressures of the soaring oil price.

It has been a long day but Tarek Sultan still has plenty of fight left in him.

"On a net basis our Q1 profits are down 10%, but on an operating level they are actually higher than last year," he argues as we charge across the floor of a packed conference hall, delegates scattering to our left and right.

At well over six feet tall, it's a race to keep up with the chairman and managing director of Agility as he strides across the room - just as business rivals are finding it near-impossible to keep pace with the growth of his Kuwait-based firm.

Formerly PWC Logistics, Agility is today a global provider of end-to-end supply chain solutions, with more than 32,000 employees in 550 offices located in over 100 countries around the world.

Its three key operating units - Global Integrated Logistics (GIL), Defense & Government Services (DGS) and Investments - extend around the globe, and the company is continuing its expansion throughout 2008.

Nevertheless, Agility did see its Q1 2008 profits drop 10%, as net income fell to US$141.4m from US$157.3m for the same period last year.

The drop was the firm's second consecutive double-digit fall in earnings - it posted a 10.5% fall in Q4 profit year-on-year to US$131.6m, while full-year profit for 2007 stood at US$580.5m. However, Sultan emphasises that figures can be misleading.

"We've had increased costs because of issues in the financial markets which have been a challenge, but we've recently done a syndication to bring down the financing cost," he explains.

"Secondly, you have to take into account some non-recurring items from Q1 last year," he continues. "So if you strip those out and pick out the financing cost differential you will actually see an improvement in the top line, and the same thing with the net operating income figures."

Agility has announced plans to increase its share capital by 25% selling shares for 450 fils each to existing investors. It paid a cash dividend of 80 fils each and a 10% bonus share issue for 2007.

While Sultan will not give guidance on profit forecasts, he insists the company will touch US$7bn in revenue by the end of 2008, up from approximately US$6bn last year.

This growth should be achieved despite the rising oil price, which has exerted pressure on logistics firms around the globe.

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