Agility takes dividend holiday to save cash
KUWAIT-based global logistics group Agility, which saw a rise in 2008 revenues but a fall in operating and net profits, has taken a dividend holiday to conserve cash for bargain buys. Chairman and managing director Tarek Sultan said: “In order to capitalise on opportunities emanating from the global financial crisis, the board of directors is recommending to shareholders that no dividends be paid for the fiscal year 2008.” He added: “Agility believes that the ongoing financial crisis has created unique opportunities for forging new partnerships and acquiring assets on the basis of attractive and previously unobtainable business terms. “We have an excellent cash position, healthy debt profile, a diversified customer base and an established footprint in the emerging markets that offer the most potential for future growth.” Agility, which has built up its worldwide supply chain presence through a series of strategic logistics acquisitions, announced a 16% rise in 2008 revenues to $6.8bn and a net profit of $526m, down from $542.9m a year earlier. A 2008 operating profit of $600m was down from $614.5m in 2007. Mr Sultan said: “Even though we began to feel the impact of the global economic crisis in our commercial business in the fourth quarter of 2008, Agility was able to achieve strong profits which helped enhance our balance sheet position.” The company’s asset base grew 6% in 2008 to $6bn and Agility borrowed around $850m from international and regional banks, using the funds to pay down short-term debt and extend the maturity of remaining debt. Over 60% of Agility’s debt is due after 2010, which Mr Sultan says puts the company “in a strong position”. “We are managing our cash position to offset our outstanding debt balance, to achieve a position of zero net debt and maintain an enviable level of financial flexibility during these times of turmoil. “As of year-end 2008 we have a healthy cash flow from core operations and a cash balance estimated at $919m. We believe our strong focus on our core business will ensure continued growth.”
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