Aramex first quarter net income climbs 4% on revenue rise

Net income for the three months to the end of March climbed to Dh108m

Aramex, the Middle East's biggest courier company, reported a 1 per cent increase in its third-quarter profit. Pawan Singh / The National

Aramex, the largest Middle East courier and logistics company, reported a 4 per cent year-on-year rise in its first quarter net income as revenues rose on the back of cross-border international express couriers volumes increase.

Net profit for the three months to the end of March, climbed to Dh108 million, the company said in a bourse filing to the Dubai Financial Market, where its shares trade. Revenues for the quarter also rose 4 per cent to Dh 1.23 billion from a year-earlier period.

Excluding the impact from currency fluctuations, mainly in the Libyan dinar, South African rand and Australian dollar, revenues for the period would have grown by 8 per cent, Aramex said, adding that “strategic restructuring” of its domestic operations in India also impacted the revenue growth in the reporting period.

Cross-border international express volumes jumped 22 per cent, despite a 2.2 per cent decline in margins, it added.

“We continue to benefit from the healthy growth in global e-commerce volumes; however, we have started witnessing pressure on international express margins due to lower and more competitive pricing,” said Bashar Obeid, chief executive of Aramex.

“Our key priorities for this year are to continue to invest in upgrading our service level across all our core markets, while progressing aggressively in executing our digital transformation roadmap, he said, adding that the strategy will help boost operational efficiencies to better serve rapidly changing e-commerce business requirements.

The firm’s integrated logistics and supply chain management business rose 23 per cent to Dh85m, largely due to the strong appetite of major regional retailers to tap into omni-channel sales model, which led to strong demand for warehousing, sorting, and last-mile delivery solutions.

The company, however, reported an 8 per cent rise in operating expenses in the first three months of the year on the back of expansion of infrastructure in key markets such as Saudi Arabia.

Despite lower margins and rising expenses, the company maintains a positive outlook for the remainder of the year, with plans to grow its market share by being more competitive with pricing, it said.

“Despite lower margins, we remain confident about our freight forwarding business, driven by our internal restructuring efforts, the introduction of new dedicated teams and our aggressive push into new verticals [business lines],” Mr Obeid said. “We are also optimistic about the opportunity to expand our logistics and supply chain solutions in the region.”