Improved global operations help Aramex quarterly gains to climb 3%

Aramex, the Middle East’s biggest courier company, reported a 3 per cent rise in first-quarter net profit on higher revenue and improved global operations.

The profit for the threemonth period through to the end of March rose to Dh47 million ($12.8m), Aramex said.

Excluding the impact of write-offs from discarded technology, net income rose by 14 per cent to Dh52m during the period, it said.

Revenue rose 2 per cent annually to Dh1.45 billion, bolstered by the strong performance of the company’s logistics and freight-forwarding business.

Aramex enjoyed a “strong start” to the year, with profit margins beginning to stabilise, chief executive Othman Aljeda said.

“This is predominantly attributed to the strategic decision to boost contribution from the freight-forwarding and logistics business to our revenue mix,” he said.

“It is also driven by improving global operating conditions, as well as the realisation of cost and operating efficiency enhancements in the courier business.”

Logistics and cargo companies registered a sharp growth in business in 2020 after the outbreak of the Covid-19 pandemic.

But the industry has also been hit with rising costs due to supply chain bottlenecks, which, in turn, have put pressure on the margins of freight-forwarding companies.

Aramex’s operating profit at the end of the three-month period slipped 6 per cent to Dh75m.

Revenue at its courier business — which includes domestic and international express operations, as well as business-to-business and e-commerce offerings — also fell 9 per cent to Dh911m during the first quarter. The company attributed the drop to slowing demand for e-commerce as travel picked up.

The Covid-19 years of 2020 and 2021 were “a black swan event” for the business, said Alaa Saoudi, chief operating officer of Aramex Express.

“We witnessed unexpected surges in volumes because of the global lockdown,” he said.

“However, over the past three months, as most countries reopen and the majority of consumers return to normal shopping habits, we inevitably saw a softening in volumes in cross-border express.”