Aramex to sell 60% stake in JV with Austrialia Post for $20m
Courier company to incur a one-off $13m write-off after sale but does not expect revenues to be affected
Aramex, the largest Middle East courier company, will sell its stake in a joint venture with Australia Post for $20 million (Dh73.5m) as both companies seek to pursue opportunities in e-commerce independently.
Aramex will transfer its 60 per cent investment in the e-commerce JV company Aramex Global Solutions to Australia Post, it said in an emailed statement on Tuesday. It will incur a $13m one-time write-off that will reflect in its fourth-quarter financial results after the sale is completed.
"The divestment will not affect our e-commerce growth strategy," said Bashar Obeid, Aramex's chief executive. "We will continue to tap into this growth by enhancing our last mile delivery solutions and further improving service levels through investments in technology and digitisation.”
Aramex and Australia Post formed the JV based in Singapore in 2016 to create an e-commerce delivery service focused on connecting the Australian market with sellers in Asia. The remaining 40 per cent in the JV was held by Australia Post .
When completed, the divestment will not affect Aramex's revenues as the JV was accounted for an equity basis, the company said.
The decision to sell the stake was a "mutually agreed" deal to allow both companies to focus on their own e-commerce growth plans independently, Aramex said.
Aramex reported a 38 per cent increase in third-quarter net profit citing growth in its e-commerce business. Net profit in the three months to September 30 rose to Dh113m and revenue grew 8 per cent year-on-year to Dh1.24 billion.
The company’s international express business grew due to expansion in cross border e-commerce across the regions Aramex operates in, particularly in Asia and Turkey.
"The global e-commerce market continues to grow at a strong rate, transforming our industry and presenting huge opportunities for us to expand our business in our target markets," Mr Obeid said on Tuesday.
Updated: December 18, 2018 02:19 PM