Aramex's Saudi acquisition to boost profit from first quarter of 2019
The largest Middle East courier and logistics company paid $80m for the deal
Aramex, the largest Middle East courier and logistics company, said its $80 million (Dh293.6m) acquisition of Saudi Tal for Commerce and Contract Company will help increase net profit by about $6m before accounting for loan costs.
The gain will be reflected in earnings starting in the first quarter of 2019, the company said in a statement on Monday to the Dubai Financial Market, where its shares are traded.
The acquisition will be 40 per cent financed through a bank loan that will be paid over a five-year period, while the remaining amount will be financed by the company’s own balance sheet, Aramex said.
The Dubai-headquartered firm on Sunday announced the acquisition, which opens more avenues of growth in Saudi Arabia, the biggest market for the company in the Middle East.
Established in 1982 as an express courier services, Aramex has grown its operations in 65 countries. The company, the first from the Arab world to list on Nasdaq before delisting to go private and later listing on the Dubai Financial Market, is seeking growth opportunities as it realigns its portfolio subsidiaries.
In December, Aramex said it will sell its stake in a joint venture with Australia Post for $20m as both companies to pursue opportunities in e-commerce independently. Aramex considers e-commerce, which increased the company's overall revenue by 19 per cent in 2017, as a strategic imperative.
The company reported a 38 per cent increase in third-quarter net profit citing growth in its e-commerce business. Net income in the three months to September 30 rose to Dh113m and revenue grew 8 per cent year-on-year to Dh1.24 billion.
The company’s international express business grew due to expansion in cross border e-commerce across the regions where Aramex operates, particularly in Asia and Turkey.
Updated: January 14, 2019 01:40 PM