Aramex appoints new CEO as first-quarter profit slides
Middle East's largest courier company's revenue in the first quarter grew 24% to Dh1.4bn
Dubai-listed Aramex appointed Othman Aljeda as its new chief executive as the company reported a 32 per cent decline in first-quarter profit but saw revenue soar on the back of rising e-commerce.
Profit in the first three months of the year fell to Dh46 million ($12.5m) from the same period a year earlier, the company said in a regulatory filing on Thursday to the Dubai Financial Market, where its shares trade. Revenue in the first quarter grew 24 per cent to Dh1.4 billion.
Operating profit declined 20 per cent to Dh79m. First-quarter earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins fell 11.9 per cent, "impacted by an increase in line-haul costs on the back of global capacity constraints caused by supply chain disruptions the industry continues to face due to the pandemic", Aramex said.
"The capacity shortage during the quarter was further exacerbated as the global Covid-19 vaccines transportation and distribution gathered pace."
Aramex said it maintained a strong balance sheet with a negative net debt position of Dh353m and a strong cash balance that will help it continue investing in scaling operations, digital solutions and executing on future opportunities including acquisitions.
“We witnessed revenue growth across all our business lines, an indication that the global economy is staging a gradual recovery and that business and consumer confidence is improving," departing chief executive Bashar Obeid said. "We are very encouraged by the double-digit growth in our revenues, which was predominantly driven by a healthy increase in demand from cross border e-commerce and last-mile services."
Mr Obeid resigned last month for personal reasons after 28 years at the company and will work closely with Mr Aljeda to support a smooth transition of responsibilities.
Mr Aljeda joined Aramex in 1994 and over two decades strengthened the company’s business in the GCC, Asia, North America and Europe. He set up Aramex’s first regional office in Asia and led its expansion, establishing hubs in Hong Kong and Singapore.
Mr Aljeda played an integral role in leading Aramex’s first successful acquisition of Mail Call in Australia and also the acquisition of Fastway Couriers in Australia and New Zealand.
In 2017, Mr Aljeda was named Aramex’s regional chief executive for Europe, North America and Asia. In 2020, he also served as interim chief operating officer for six months.
"I am honoured to pass the reins to Othman," Mr Obeid said. "Othman is a well-respected leader with a proven track record of driving change and constantly innovating to consistently deliver results year after year."
Aramex's international express business, which includes Shop & Ship, surged 35 per cent to Dh647m, driven by growth in cross-border e-commerce activities in the US, UK, Hong Kong and other Asia markets into the GCC. Its domestic express business revenue grew 23 per cent to Dh356m, led by a 36 per cent increase in domestic e-commerce volumes in core markets, notably from Saudi Arabia.
Freight-forwarding revenue grew 10 per cent Dh288m, while logistics and supply chain solutions increased 10 per cent to Dh105m.
“Aramex is a trusted market leader with a powerful growth story and is well-positioned to navigate and thrive in these unprecedented times," Mr Aljeda said. "Along with the rest of the management team, we will continue to build on our solid foundation, capitalise on our strengths, grow our industry verticals, and take the lessons we learned from the pandemic to find the most innovative solutions and create greater value for our customers.”
For the remainder of the year, Aramex will "double down" on increasing and further diversifying its revenue streams and consolidating its position in core markets through acquisitions, Mr Obeid said. The company will continue to invest in its business and accelerating its digital transformation, while also managing line haul costs and improving margins.
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 and went public again in 2005 and is currently listed on the Dubai Financial Market. Mr Ghandour sold his remaining shares in Aramex in 2016.
Updated: May 6, 2021 01:56 PM