Leading Middle East courier company says its international express business helped boost profits
Aramex fourth-quarter net income jumps 25% on e-commerce growth
Aramex, the biggest courier company in the Middle East, reported a 25 per cent increase in 2017 fourth-quarter net profit as revenues surged and income from its express e-commerce business boosted profitability.
“Our strong results were mostly driven by the surge of cross-border e-commerce activities globally, which continue to fuel the growth of our international express business,” said Bashar Obeid, who took over as Aramex chief executive in November.
The company reported net income of Dh165 million for the three-month period to December 31, up from Dh131.8m a year earlier, it said in a statement to the Dubai Financial Market, where its shares are traded. Revenues for the last three months of 2017 grew to Dh1.32 billion, a 14 per cent increase from the same period in 2016.
“We have witnessed an exceptional growth of express volumes in the fourth quarter, which highlighted a need to boost investments in last-mile capacity solutions across all our key markets,” said Mr Obeid.
Aramex's international express business registered a 22 per cent increase to Dh609m from a year earlier. The company attributed the growth to strong cross-border e-commerce business performance across all regions.
The domestic express business recorded a 10 per cent year-on-year rise to Dh272m in the fourth quarter. Its freight-forwarding business grew by 11 per cent to Dh304m over the same period, mainly due to a rebound in Aramex’s oil and gas business in the Arabian Gulf, and a pick up in markets across North Africa, the Levant and Asia, it said.
Full-year 2017 net profit rose 2 per cent to Dh435.4m from the same period in 2016. The 12-month earnings were impacted by a one-time fair value adjustment related to the company’s investment in its AMC Logistics joint-venture in Egypt, Aramex said. Excluding that adjustment, net profit last year would have grown by 13 per cent.
The company's 2017 revenues rose 9 per cent year-on-year to Dh4.72bn. Revenues were impacted by currency fluctuations, mainly in Egyptian pound, the company noted.
"We are very confident about the growth potential in 2018 amid the continuous boom in e-commerce activities globally, yet we have to remain cautious about the changing competitive environment,” said Mr Obeid.
“We will be focusing on key strategic initiatives in 2018 aiming at transforming our business into a technology-driven enterprise and enhancing our operational efficiencies through various cost restructuring programmes.”