Aramex today announced strong profits and double-digit revenue growth for 2016 and is eyeing more international acquisitions but also warned of slower growth this year.
The Middle East-based express and freight group increased its full-year revenues by 16% to AED 4,343 million (€1,111m) and net profits improved by 37% to AED 426.6 million (€109m).
In the strong fourth quarter, revenues saw double-digit growth of 18% to AED 1,158 million, while net profits more than doubled with a 129% rise to AED 131.8 million.
Aramex’s International Express business performed strongly in Q4, 2016, with revenues growing by 30% to AED 498 million. Strong growth in cross-border e-commerce continued to be a primary driver of these revenues, especially in Asian, European and the US markets.
The Domestic Express business increased revenues by 30% to AED 247 million, primarily driven by the Fastway acquisition in Australia.
Aramex’s Logistics and Supply Chain Management increased by 29% in Q4 to AED 67.3 million. This increase is mainly attributed to Aramex’s investment in AMC Logistics’ Joint Venture in Egypt, which became part of Aramex’s financial consolidation starting January 2016.
In contrast, freight revenues decreased, by 9% to AED 272 million in Q4. Freight continued to be affected by lower selling rates, which was driven by lower oil prices and global currency fluctuations.
Commenting on the results, CEO Hussein Hachem said: “We are extremely pleased to report record results with our 2016 financial performance. Despite global economic uncertainty and the slowdown in the GCC region, our asset-light business model enabled us to respond quickly to volatility, outperform the market and deliver on our promise.
“Our commitment to innovation and technology were two core areas of focus this year, allowing us to enhance our customer experience and expand our business operations. We will continue to leverage this strategy, finding innovative ways to develop our global express solutions to serve the growing demand for our last-mile solutions across all our markets.”
Looking back, Aramex described 2016 as a “milestone year” for new partnerships and innovations across its global network. The company fully acquired Fastway Limited to further strengthen its presence in Australia and New Zealand. Aramex also formed a joint venture with Australia Post to launch the “Aramex Global Solutions”, a hybrid product accessible through postal offices worldwide.
As part of the company’s strategy to scale up through a variable business model, Aramex invested in a number of delivery startup businesses worldwide in order to optimize its last-mile delivery solutions. Additionally, the company invested in a new global addressing system which allows Aramex to reach more customers in off-the-grid locations.
Aramex also launched its innovative mobile app to improve the delivery experience for customers. In 2016, Aramex continued automating its sortation centers globally, in order to stay on top of the increasing demand in its cross-border e-commerce business. Aramex also rolled out its Enterprise Resource Planning (ERP) platform, which will enable it to adopt industry best practices and further strengthen collaboration across key business units.
Commenting on Aramex’s outlook for 2017, Hussein Hachem said: “These robust results have put us in a strong position to deliver on our ongoing business strategy as we move into the new fiscal year. Looking ahead, we will continue to focus on investing in technology to further transform the business into a technology-driven enterprise and lead the market by sourcing disruptive, digital-based solutions.
“While we remain confident in this approach, we are also cautious in our outlook due to global economic uncertainties. However, we are excited about the positive growth we have achieved so far and look forward to carrying this momentum into 2017.”
According to a Reuters report, Hachem told a press conference in Dubai today that the group expects a slower single-digit increase in revenue and profits in 2017, but with strong e-commerce volume growth of 30%.
Bloomberg reported that Aramex is actively looking at acquisitions in Latin America and considering relocating some of its UK operations to France or the Netherlands if a future UK-EU ‘Brexit’ deal does not protect free trade flows.
