Aramex delivers marginal net gains
FOCUS ON FREIGHT-FORWARDING HELPED WITH IMPROVED PROFIT MARGINS, SAYS CEO
Aramex has increased its foreign ownership limit to 100 per cent from 49 - this makes it the ‘first onshore UAE company listed on the Dubai Financial Market to allow for full ownership of its free-floating shares by foreign investors’.
“Aramex is a constituent of the FTSE Emerging Market Index and the MSCI Small Cap Emerging Market Index,” said a statement. “The change in foreign ownership is expected to increase the stock’s available foreign room, which would result in an increase of the stock’s weight in these indices, followed by an increase in passive money flows.”
The Dubai logistics firm had good tidings from the first quarter, with net profit marginally higher by 3 per cent to Dh47 million, while revenues inched up 2 per cent to Dh1.45 billion.
Helping the cause was a ‘strong’ performance on the logistics and freight-forwarding side. For now, Aramex reckons that the numbers will hold up despite the ensuing concerns from the Ukraine situation and the steady march of inflation. Aramex had last year initiated changes to its operating model, to be a far more nimble business.
“We are starting to see a stabilization in our profitability margins,” said Othman Aljeda, CEO. “This is predominantly attributed to the strategic decision to boost contribution from the freight-forwarding and logistics business to our revenue mix. It is also driven by improving global operating conditions, as well as the realisation of cost and operating efficiency enhancements in the courier business.” The logistics and freight-forwarding revenue was up an impressive 28 per cent to Dh503 million. Freight forwarding alone surged 36 per cent to Dh391 million in the first three months, ‘predominantly driven by solid demand from SMEs and strong recovery in business activity in the oil and gas sector’. Aramex also made strides with an organisational restructuring.
Offsetting the courier drop
This did help offset to an extent the 9 per cent drop on the courier business, to Dh911 million. This was caused by a slowdown in cross-border business. “This is attributed to an increased level in consumer travel which impacted demand for e-commerce,” said a statement. On the positive side, domestic express revenues ‘held firm’ with Dh353 million.