Net profit at Agility more than halved in the first quarter and the Gulf's biggest logistics provider said future earnings would suffer from legal costs and lost contracts following fraud charges. The firm, formerly Public Warehousing Co. K.S.C. (PWC), has been accused of overcharging the US Army over 41 months under contracts to supply $8.5 billion of food to troops in Iraq, Kuwait and Jordan.
If convicted, prosecutors say the company faces a fine of twice the gains it realised or twice the loss to the United States. Agility says it is in talks with the US government to settle the fraud charges, but there is no guarantee an agreement can reached. The firm was suspended from bidding on new contracts last November last year. "Agility is likely to face declining profitability over the course of the next four quarters, as a result of major US government contracts winding down in Iraq, recovery from the global recession, and the financial impact of the legal dispute with the US government," the firm said on Sunday.
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