Dubai-based logistics major Aramex on Thursday reported a 59 percent slump in net profit for the third quarter of 2020 after the company suffered losses related to property damage caused by Lebanon’s port blast and a warehouse fire in Morocco.
Excluding the incidents, Aramex said net profit would have been down by 13 percent year-on-year to AED99.1 million.
Net profit for the nine-month period decreased by 40 percent to AED208 million.
Aramex’s Q3 revenue increased by 19 percent to AED1.5 billion, a new record high for the quarter, with international express business rebounding from the previous quarter as global business activities have generally started to pick up with Covid-19 related lockdowns, mobility restrictions and border closures easing over the three-month period.
Revenue for the nine-month period increased by 7 percent to AED4 billion, the company said in a statement.
Bashar Obeid, CEO of Aramex, said: “We witnessed a very strong set of results over the three-month period, achieving the highest Q3 revenue on record supported by growth across most of our business lines. Covid-19 has accelerated growth in the e-commerce industry, which remains the dominant driver of our top line growth.
“We also managed to capture new opportunities from other industries, namely healthcare and pharmaceutical as well as retail and food and beverage. This has enabled us to further diversify our revenue mix, which is a core part of our commercial strategy to ensure we continue to grow sustainably through various market cycles.”
He added: “However, Covid-19 has also increased our overall operating costs across multiple parts of our business including costs related to scaling last mile operations and cross border transportation. While we believe the operating capital that has been deployed to expand our last mile capacity will normalise in the coming quarters, relatively higher line haul costs are here to stay for the foreseeable future.
Bashar Obeid, CEO of Aramex
“Moreover, given the increased price sensitivity of our customers, a trend which we have been experiencing over the last few years, our pricing strategy is to remain competitive while ensuring we continue to provide efficient and high-quality service.”
He also said he believed the region’s transportation, logistics and last mile delivery industry was “ripe for consolidation”, adding that Aramex is “actively seeking potential opportunities”.
Othman Aljeda, regional CEO for Aramex in Europe, North America and Asia, said a 35 percent growth in total volumes had been seen over the period, with the majority of the contribution coming from core markets including Saudi Arabia and the UAE.
Commenting on Aramex’s outlook for the remainder of 2020, Obeid said: “For the upcoming holiday period we anticipate new and veteran online shoppers to turn to online channels to buy goods and send gifts to family and friends all over the world. As such, we expect healthy demand for our express business, and we are confident that our operations and dedicated teams are well prepared to handle the expected surge in volume in a timely and efficient manner.”
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