Aramex posts 36% surge in second quarter profit

Aramex, which is traded on the Dubai Financial Market, said its half-year revenues increased 15 per cent year-on-year to Dh2.134 billion from Dh1.856 billion for the corresponding period of 2015.

Aramex, a leading provider of comprehensive logistics and transportation solutions, announced on Thursday a 36 per cent jump in second quarter net profits to Dh125.7 million from Dh92.5 million in the same 2015 period.
Revenues rose by 17 per cent to Dh1.105 billion from Dh946 million in the same 2015 period, the Dubai-based company said in a statement amid reports that it has sold a minority stake to Gulf based investors.
The company, which is traded on the Dubai Financial Market, said its half -year revenues increased 15 per cent year-on-year to Dh2.134 billion to Dh1.856 billion for the corresponding period of 2015.
Net profits during the same period rose to Dh222.5 million, up from Dh179.2 million in the first half of 2015, a year-on-year increase of 24 per cent. Overall net profits registered double-digit growth, impacted by a one-time fair value adjustment related to Aramex's investment in AMC Logistics joint venture in Egypt amounting to Dh41.6 million.
Hussein Hachem, Aramex chief executive officer, said despite global economic uncertainty, continuing oil price volatility and currency fluctuations, results for the quarter were strong. "However, though we finished strongly, we experienced slowing growth at the end of the quarter. We are closely watching this trend so we can quickly adjust to further volatility and remain cautiously optimistic about continuing our growth momentum into the second half of 2016."
The company's second quarter results come amid reports that its founder and vice-chairman, Fadi Ghandour sold his 9.9 per cent stake in the company to Gulf investors. The stake was reportedly worth around Dh523 million at Monday's closing price, a Bloomberg report said.
Aramex's strong revenue performance in second quarter was driven by growth across most of its geographies. Europe, Asia and Australia were the biggest contributors to growth, with the recent acquisition of Fastway Couriers contributing significantly to revenues. The wider Levant region also grew at a healthy rate while in the GCC we witnessed a relatively flat growth. Aramex made the $125 million acquisition of Fastway Couriers, a courier service headquartered in New Zealand in January in its second take over deal in the Asia-Pacific region to date and involving a 100 per cent buyout of the company's business in New Zealand and Australia.
Fastway Couriers' global network includes 63 regional depots and 1,500 courier franchisees across Australia, New Zealand, Ireland, Northern Ireland and South Africa. With more than 250 franchise partners across New Zealand alone, the company transports 16 million parcels globally to 75,000 customers each year. Its courier franchisees offer cost effective, reliable and fast delivery services and are supported by the latest innovative technologies and online parcel track and trace facilities.
Aramex said strong revenue growth was also recorded in second quarter from the International Express business, primarily in the US, Europe and Asia regions, due to a continued increase in demand for cross border e-commerce shopping services. Growth in the freight business remained relatively stagnant as a result of the drop in global oil prices and currency fluctuations.
Aramex said it remains confident about extending its growth momentum and performance into the remainder of 2016. While the global economic outlook is uncertain, it will continue to invest in its business by leveraging disruptive and innovative technologies.
Aramex said it had invested in a number of mobile-based start-ups this year in various global markets in line with its Rapid Scaling-Up Model, which was developed to help leverage more partnerships with delivery businesses and improve its last-mile delivery solutions. Aramex also recently partnered with the UK-based global addressing platform what3words and will be integrating the system into its e-commerce fulfillment operations later this year.
The company said its recently announced global alliance with Australia Post will allow Aramex to access global markets through a unique product offering aimed at servicing the increased demand for cross-border e-commerce solutions.
- issacjohn@khalkeejtimes.com