Aramex Q1 2019 revenue increases by 4%

Aramex

Aramex has announced its Q1 results for 2019. It reported revenue growth of 4% to AED1.2bn from AED1.1bn in Q1 2018. Aramex anticipated revenues would grow by 8%, but due to the impact from currency fluctuations, mainly in the Libyan Dinar, South African Rand and Australian Dollar; and the company’s strategic restructuring of its domestic operations in India, it didn’t increase as much as expected.

Net profit also increased by 4% to AED108m compared to AED103m in Q1 2018. Again, Aramex explained currency fluctuations negatively impacted profit by AED10.6m. However, Aramex’s strategic restructuring of domestic operations in India delivered a positive contribution of AED6.7m to net income. Excluding those impacts, the bottom line would have grown by 8%.

Aramex’s cross-border International Express business grew by 7% to AED533m. This performance is mainly attributed to the continuous growth in cross-border e-commerce, which registered double-digit growth across most of Aramex’s markets, mainly Turkey, Asia and North America. Shipment volumes grew by 22% in Q1 2019, yet lower margins prevailed.

Domestic Express business revenues dropped by 3% to AED257m, due in large part to the strategic restructuring in India and fluctuations in foreign currency, mainly in the South African Rand and Australian Dollar. The e-commerce Domestic Express business performed very well in GCC markets, and registered double-digit growth especially in Saudi Arabia and the UAE.

Freight Forwarding revenue growth stabilised at 1% to AED287m, with Oil & Gas segment experiencing strong double-digit growth.

The Integrated Logistics & Supply Chain Solutions business experienced strong growth of 23% to AED85m, owed in large part to Aramex’s efforts to service the major regional retailers’ strong appetite to tap into omni-channel sales model, which led to strong demand for warehousing, sorting, and last mile delivery solutions.

Bashar Obeid, Chief Executive Officer of Aramex, commented, “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. 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. This will help us boost operational efficiencies to cater for rapidly changing e-commerce business requirements, including faster shipping and delivery solutions at lower costs.

Our Integrated Logistics and Supply Chain Management business had a great quarter, thanks to our efforts to mobilise assets and resources to capitalise on the increase in demand for those services, especially from regional retailers aiming to boost their online sales.”

Source: Aramex

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