Aramex profit fell 5 per cent in the first quarter, after the delivery and logistics firm increased provisions for its company incentive scheme.
Net income came in at Dh91.8 million for the three months to the end of March, compared with Dh96.9m during the same period last year, below analyst estimates.
Aramex said the drop was because of a Dh13.3m additional provision “related to the company’s incentive scheme”, giving no further details.
Revenues rose 7 per cent to Dh1.1 billion from Dh1bn, again fractionally below an average of estimates collected by Bloomberg.
Aramex said currency fluctuations in key markets including Egypt took their toll on revenues, particularly affecting the company’s freight forwarding business. The company said revenue growth on a flat exchange rate basis would have come in at 13 per cent.
Aramex’s international express business revenues grew by 20 per cent to Dh457m during the quarter, driven by the “robust” performance of cross-border e-commerce, and continues to be the main driver of growth. The company’s e-commerce deliveries grew 30 per cent during 2016.
Domestic Express business grew by 5 per cent to Dh243m during the quarter, with Asia-Pacific contributing significantly. Asian revenues across all business lines grew by 60 per cent year-on-year.
“International Express was the key driver of growth in the first quarter and will continue to drive Aramex’s business strategy and expansion plans,” said the Aramex chief executive Hussein Hachem. “We are confident about carrying the same positive momentum into the second quarter of 2017.”
The Middle East and Africa accounted for 61 per cent of first-quarter revenues. However, revenue across the region fell 4 per cent year-on-year, with the company stating that it was “cautious” on the GCC outlook.
Mr Hachem said Aramex would continue to “actively look” for further acquisitions and partnerships in key markets.
jeverington@thenational.ae
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