Aramex, the Middle East’s biggest courier company, said the global economic recovery and higher oil prices will boost the growth of logistics and freight-forwarding business in 2022, as it reported a 47 per cent jump in third-quarter net profit.
Net profit attributable to shareholders for the three-month period to the end of September increased to Dh67.8 million ($18.5m), compared with the same period last year, Aramex said in a statement on Sunday to the Dubai Financial Market, where its shares are traded.
Revenue was little changed at Dh1.46 billion, compared with Dh1.466bn in last year's third quarter, driven by double-digit growth in domestic express and a strong rebound in logistics and freight-forwarding business.
"Over the last few months, we have witnessed an almost complete return to [a] pre-Covid operating environment and are noticing a few trends that we believe will continue to shape the future of our business and drive our growth strategy," Aramex group chief executive Othman Aljeda said.
While global sea freight issues are disrupting supply chains, the impact on Aramex's business "has so far been manageable" and it expects these issues will be resolved in the coming few quarters, Mohammad Alkhas, chief operating officer of Aramex's logistics and freight-forwarding unit, said.
Land freight movement has improved considerably, and we are benefitting from increased capacity," Mr Alkhas said.
Aramex's new operational structure that was adopted in September is reflecting positively in its performance, Mr Aljeda said. The new structure split its core businesses into Aramex Express and Aramex Logistics to capture a greater market share of the global logistics industry.
“With a renewed emphasis on enhancing operating efficiencies, improving service levels to customers, building scale and [the] reorganisation of our team of professionals, we have been able to capture growth opportunities in both the courier business and [the] logistics and freight-forwarding business," he said.
The company's courier business, which includes international express and domestic express, posted a six per cent year-on-year decline in third quarter revenue to Dh997.4m. However it's up 13 per cent in the first nine months of the year.
Domestic express revenue grew 13 per cent, with shipping volumes driven by an increase in the number of retailers tapping into online sales. It's up 14 per cent over the nine-month period.
Operations in Saudi Arabia, the Arab world's largest economy, are posting "very strong growth" as Aramex presses on with its expansion in the kingdom, the company said.
"We are very encouraged by the recovery in economic activity in the GCC and around the world, and believe this growth will be sustained for the foreseeable future," Mr Alkhas said.
The improved oil prices and pick-up in activity within the oil and gas sector has encouraged GCC governments to increase investment and expenditure in key projects, he said.
"Collectively, these factors have supported the growth of the logistics and freight-forwarding business, and we expect this growth momentum to continue well into 2022."
Oil prices are at multi-year highs and have rallied more than 60 per cent since the start of the year.
Aramex is "very well prepared" to handle the expected surge in volumes as it approaches the busiest period for the courier business during the holidays, Mr Aljeda said.
"We believe we will continue to unlock opportunities and build scale while remaining agile, asset light and financially flexible," he said. "We will also further diversify and strengthen our global network to remain resilient to economic cycles and supply chain disruptions.”
