Middle East's largest courier firm grew net profit to Dh103 million in first quarter of 2018
Aramex reports 13% rise in first quarter profit as global e-commerce grows
Aramex, the biggest courier firm in the Middle East, reported a 13 per cent rise in first-quarter net profit, attributed mainly to the continued growth of the global e-commerce industry and ongoing restructuring of the business, the company said.
The Dubai-based company said net profit for the first three months of the year reached Dh103 million missing the Dh105m earnings mean forecast of analysts polled by Bloomberg. Revenue for the quarter rose 8 per cent to Dh1.19 billion from the year earlier period. The net profit margin for the quarter stood at 8.7 per cent compared to 8.3 per cent in first quarter of 2017.
“We maintain a positive outlook for the year, as we expect to continue to benefit from the boom in global e-commerce activities,” said Bashar Obeid, chief executive of Aramex said in a statement to the Dubai Financial Market, where the company's shares are traded. “We expect stronger contribution from e-commerce activities to our domestic express services in future, as major e-tailers are establishing fulfilment centres in our core markets.”
Aramex said its international express business grew by 10 per cent to Dh500m due to strong growth in cross-border e-commerce across most regions, in particular Europe and the GCC. Growth in Asian markets was “modestly lower” in the first quarter of 2018, but the company said it was confident in the region’s growth outlook for the remainder of the year.
The GCC e-commerce market is forecast to grow to $24bn by the end of the decade, according to A.T. Kearney. The management consultancy in 2016 forecast the market to grow to $20bn by 2020, but several significant developments last year – including the launch of e-commerce platform Noon.com and Amazon’s acquisition of UAE e-tailer Souq.com – prompted it to revise the figures at the end of 2017. Retail e-commerce sales worldwide are projected to grow to $4.88 trillion by 2021 from 2.3 trillion in 2017, according to figures sourced by Statista.com.
“We had a good start in the first quarter of 2018...our focus this year will be on accelerating the [company’s] digital transformation, boosting operational efficiencies and enhancing our B2B and freight forwarding capabilities across the network,” Mr Obaid said.
Aramex is redesigning its operations to create a “more efficient and customer-centric business model…expand capacity, and simplify complex operational processes”, said Iyad Kamal, Aramex’s chief operating officer.
The company's domestic express business grew 9 per cent to Dh265m, driven by healthy growth in domestic e-commerce activities across Aramex’s key markets, mainly in the GCC and Africa.
Freight forwarding grew by 3 per cent to Dh284m, as Aramex’s oil and gas business in the GCC and Asia benefitted from an improving hydrocarbons industry on the back of rising oil prices.