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Abu Dhabi, UAESunday 18 November 2018

Aramex Q2 net profit surges 26% as e-commerce boosts business 

Dubai courier company on-track to deliver "strong" results in 2018

One analyst polled by Bloomberg forecast a net profit of Dh100m.  Silvia Razgova / The National
One analyst polled by Bloomberg forecast a net profit of Dh100m.  Silvia Razgova / The National

Aramex, the Middle East's biggest courier company, said on Wednesday its second-quarter net profit increased 26 per cent as e-commerce and the energy sector fuelled demand for its services.

The Dubai-listed company made a net profit of Dh122 million in the three months to June 30 from a year earlier, it said in a statement to the Dubai Financial Market, where its shares are listed. Quarterly revenues reached Dh1.23 billion, a 7 per cent rise from the same period last year.

The results beat Sico Bahrain's Dh109.3m estimate for second-quarter net profit, according to a Reuters poll.

The quarterly earnings boost is "attributed to the increase in demand for our services across most of our businesses and to our restructuring efforts," Bashar Obeid, Aramex chief executive, said. "We are on-track to deliver strong results this year."

Aramex has benefited from a pick-up in cross-border e-commerce as online shopping becomes more popular among the Middle East's young and tech-savvy population. A recovery in oil prices from a three-year low has stimulated an economic rebound in the oil-rich Gulf countries.

The company's freight-forwarding business rose by 1 per cent to Dh296m, driven mainly by oil and gas customers, it said.

Aramex's international express business expanded 10 per cent to Dh528m as cross-border e-commerce grew in its key markets in the Middle East, Africa and Europe. Its southeast Asia business is gaining new customers, which are targeting Middle East online shoppers, but it posted a "lower-than-expected" quarterly performance.

Second quarter domestic express business increased 6 per cent to Dh262m year-on-year as e-commerce fuelled growth in its core markets in Saudi Arabia, the UAE and Africa. Growth was affected by a drop in business from Aramex's operations in India, it said, without elaborating.

"We continue to witness a boom in the global e-commerce market, and have been able to reap the benefits of that trend by boosting our investments in last-mile delivery solutions while enhancing our service levels," Mr Obeid said.

Dubai businessmen Mohamed Alabbar, who is behind online shopping portal Noon, has a stake in Aramex.

The logistics and supply chain management business increased by 16 per cent to Dh73m on the back of growth across all regions, mainly UAE, Saudi, North Africa and Singapore.

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Aramex will continue to pursue its digitisation strategy, which is expected to "reflect positively" on its financial performance, Mr Obeid said.

Going forward the company expects to deliver "strong" results in 2018 as it focuses on "strategic initiatives" to transform its business into a technology-driven enterprise, he said.

It will also expand its business-to-business and Freight Forwarding capabilities to "leverage great business opportunities" in its markets, including the oil and gas segment, Mr Obeid added.