Aramex increased revenues by only 4% in the second quarter as growth slowed in various markets while profits dropped 23% due to financial effects.
The Middle East-based group increased Q2 revenues by 4% to AED 1,148 million but net profits decreased by 23% to AED 97 million. Half-year revenue increased by 6% to AED 2,254 million while net profits were 15% lower at AED 188.7 million.
The profit decline resulted from the negative impact of a one-time fair value adjustment related to Aramex’s investment in AMC Logistics joint venture in Egypt in Q2 2016, the company explained. Excluding this adjustment, Q2 2017 net profits would have grown by 15%.
Furthermore, the company’s revenue growth in Q2 and the first half-year was also affected by currency fluctuations, especially the Egyptian Pound, and otherwise would have grown by 8% and 10% respectively, Aramex noted.
Outlining business trends, Aramex said that while the performance in GCC markets was relatively slow due to the holiday season and reduced number of working days, as well as the ongoing economic uncertainty, revenues grew at a healthy rate across Asia-Pacific, the U.S and Africa.
The group’s express services recorded double-digit growth in Q2 2017 and continued to be the main contributor to the company’s financial performance. Cross-border e-commerce in particular was the key driver for revenue growth especially in Asia-Pacific where customer demand for package delivery services across the region continues to rise.
Commenting on the results, CEO Hussein Hachem said: “Despite the ongoing global and regional economic uncertainty, we delivered strong results in Q2 2017. Our asset-light business model and use of innovative technologies to upgrade our operations enable us to successfully manage capacity through a variable cost model, both regionally and globally and maintain our position as the disruptive logistics player. Looking towards the second half of 2017, we are excited about our future prospects for growth, and will be actively identifying acquisitions and strategic partnerships to expand our global reach.”
Leveraging innovative technologies to support Aramex’s efforts towards becoming a technology-based enterprise will continue to be a key focus for the business in the remainder of 2017. The company said it remains committed to upgrading business operations and optimizing last-mile delivery solutions to further enhance overall customer experience.
