Dubai-based logistics major Aramex said on Wednesday that its second quarter net profit rose 1 percent to AED123 million ($33.4 million) as e-commerce drove volumes.
The company said in a statement that net profit was negatively impacted by the amount of AED8.4 million due to the implementation of IFRS16 related to accounting for leases.
Excluding that impact, Q2 net profit would have grown by 8 percent while net profit in the first half of 2019 grew by 2 percent to AED231 million.
Aramex’s Q2 revenues grew by 4 percent to AED1.3 billion, but were impacted by currency fluctuations, mainly in the South African Rand and Australian Dollar, as well as the company’s strategic restructuring of its operations in India.
Revenues in the first half of 2019 grew by 4 percent to AED2.5 billion, Aramex added.
Bashar Obeid, CEO of Aramex, said: “Strong demand from e-commerce continues to spur growth in volumes we handled over the second quarter... However, lower yields, mainly on the cross-border International Express business and changes in fulfillment models, moderated our top line figures and profitability."
He added: "We remain firmly committed to our strategic business transformation, which includes digital, commercial and operational upgrades to cater to the shifting operating environment and to retain and grow market share across different business lines. While such major changes pushed operating expenses for the period, over the long term, we are very positive that our transformation will help us improve our margins and help us further diversify our revenue mix.”
Commenting on Aramex’s outlook for the remainder of 2019, he said: “For the rest of the year, we forecast global e-commerce volumes to continue to positively contribute to top line growth, while lower yields will constrain margins and profitability.”For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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