The 23 per cent plunge driven by one-time fair value adjustment in the second quarter
Aramex to pursue acquisitions as Q2 net profit dips on currency fluctuations
Aramex, the Middle East's largest courier company, will continue to seek acquisitions even as the firm reported a 23 per cent plunge in second quarter net profit, missing analyst forecasts.
Net profit in the three months ended June 30 reached Dh97 million, compared with Dh125.7m in the year-earlier period. Revenue grew 4 per cent to Dh1.14 billion from Dh1.10bn a year earlier.
“Despite the ongoing global and regional economic uncertainty, we delivered strong results,” said Hussein Hachem, Aramex chief executive officer. “Looking towards the second half of 2017, we are excited about our future prospects for growth, and will be actively identifying acquisitions and strategic partnerships to expand our global reach.”
The Dubai-listed company said currency fluctuations, particularly from the devaluation of the Egyptian pound in November last year, and a one-time fair value adjustment related to its investment in Egyptian joint venture AMC Logistics in the second quarter of 2016 hit earnings.
The pound has lost nearly half its value since its devaluation last year.
Egyptian investment bank EFG Hermes has forecast a net profit of 104.8m, while Bahrain-based investment bank SICO had projected 97.5m in net profit, according to a Reuters poll.
Aramex's revenue in the second quarter from the Arabian Gulf region suffered from economic uncertainty, however it posted “a healthy rate” of growth in Asia, the Asia-Pacific, the US and Africa.
“Aramex’s Express services recorded double-digit growth in Q2 2017 and continue to be the main contributor to the company’s financial performance,” the company said. “Cross-border e-commerce in particular was the key driver for revenue growth especially in Asia-Pacific where customer demand for package delivery services across the region continues to rise.”