EXCLUSIVE: Logistics co denies media report it is eyeing a “major” Asian buyout.
Kuwaiti logistics giant Agility has yet to see green shoots in developed markets but is hoping to benefit from the US government’s stimulus package, its chief executive told Arabian Business on Friday.
Business from emerging markets in the Middle East, Africa and Asia is still growing, Tarek Sultan said in an interview at the World Economic Forum in Jordan.
“Emerging markets are still growing, but that growth won’t deal with all of the negative growth we’re seeing in the US, Europe and some of the other more developed economies,” he said.
The group’s project logistics business is currently concentrated in the Middle East, but could grow in countries where governments are launching economic stimulus packages, such as the US, he added.
Sultan said he “hopes” Agility will post a rise in full year revenue, but that he expects the world’s economic recovery to be protracted, and not in the form of a V shaped curve.
He denied a media report that the company is looking to make a “major” acquisition in Asia.
“We’re not restricting acquisitions to Asia. In fact, we are now focusing primarily on organic growth.”
But he added that Agility remains open to any acquisitions that will add value for shareholders.
“We maintain a healthy balance sheet, we have high levels of cash and low levels of net debt, and we have done that intentionally to take advantage of some of these opportunities that may come our way,” he said.
The company currently has around $1.5bn in cash.
Agility’s first quarter net profit rose 16.4 percent on the year to KD39.2m ($135m).
The company has three business divisions: Agility Global Integrated Logistics (GIL) is headquartered in Switzerland and provides supply chain solutions to commercial customers large and small.
Agility Defense and Government Services (DGS), based in Washington, offers logistics services to governments, relief agencies and international institutions worldwide.
Agility Infrastructure group companies primarily focus on opportunities in the Middle East, Africa and South Asia, providing infrastructure support in industrial real estate, customs optimization, and airline services.
The commercial logistics industry was seriously affected by the financial crisis in the first quarter, seeing 20 to 30 percent drops in volumes on an average, Agility said in its quarterly earnings statement.
The DGS group has been relatively unaffected by the financial crisis, it said.
The infrastructure group continued to be the focus of long term government investment and stimulus spending in the quarter, recording a 6.7 percent gain in revenue in the quarter.
The company has said it is looking to sell or find a partner for Korek Telecom, a mobile phone operator in Iraq.