Aramex raises foreign ownership limit to 100%

Move, which is effective from today, gives investors a chance to buy the company's stock as it embarks on next stage of growth

Aramex is the first UAE onshore company listed on the DFM to permit the full ownership of its free-floating shares by foreign investors. Pawan Singh / The National

Aramex, the Middle East's biggest courier company, on Monday increased the foreign ownership limit of its shares to 100 per cent, from 49 per cent, after receiving regulatory approvals.

The company raised the limit after it secured an approval from the Securities and Commodities Authority and other regulators, it said in a statement to the Dubai Financial Market, where its shares are traded.

“We would like to notify the market and shareholders that this decision in now officially activated as of today's trading session.”

The move makes Aramex “first onshore UAE company listed on the DFM to allow for full ownership of its free-floating shares by foreign investors”, the company said.

Lifting foreign ownership limits on its stock will give potential backers “the opportunity to invest in the company as it embarks on the next stage of growth and expansion”, it said earlier this year.

Courier companies such as Aramex benefitted strongly from a surge in demand for logistics and freight-forwarding services during the Covid-19 pandemic as e-commerce picked up.

Aramex reported a 3 per cent annual rise in net profit on higher revenue and improving global operations. Net profit for the three-month period through to the end of March rose to Dh47 million ($12.8m).

However, as is the case with its peers in the industry, it has also been hit with rising costs due to supply chain bottlenecks, as well as slowing demand for e-commerce as cross-border travel improves and pandemic-related curbs are eased.

Aramex's operating profit at the end of the three-month period slipped 6 per cent to Dh75m.

Revenue at its courier business — which includes domestic and international express operations, as well as business-to-business and e-commerce offerings — also fell 9 per cent to Dh911m during the first quarter of 2022.

“We witnessed unexpected surges in volumes because of the global lockdown,” said Alaa Saoudi, chief operating officer of Aramex Express, earlier this year.

“However, over the past three months, as most countries reopen and the majority of consumers return to normal shopping habits, we inevitably saw a softening in volumes in cross-border express.”

Still, the company expects growth momentum to continue this year.

Aramex's shareholding structure has changed this year. In January, Alpha Oryx, a company affiliated with investment holding conglomerate ADQ, transferred a 22.32 per cent stake in Aramex to Abu Dhabi Ports.

France's parcel delivery company GeoPost, a business owned by Le Groupe La Poste, also bought a 20.15 per cent stake in Aramex last October for Dh1.4 billion, according to a filing on the DFM at the time.

Aramex was founded in Jordan by Fadi Ghandour in 1982 and was the first company from the Arab world to list on the Nasdaq.

It later delisted in 2002 before going public again in 2005. Aramex is currently listed on the DFM.

Mr Ghandour sold his remaining shares in Aramex in 2016.