Aramex Q1 net profit plunges 38pc, revenue down 3pc
Aramex, a leading provider of comprehensive logistics solutions, has registered a 38 per cent drop in its net profit for the first quarter which hit Dh67.4 million ($18.3 million), while its revenue fell 3 per cent to Dh1.19 billion ($323 million).
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Aramex, a leading global provider of comprehensive logistics and transportation solutions, has registered a 3 per cent drop in its revenue for the first three months which fell to Dh1.19 billion ($323 million) from the previous year's figures of Dh1.23 billion ($334 million).
Announcing its financial results for first quarter ended March 31 and an update on Covid-19 measures, Aramex said the net profit for the period plunged 38% to Dh67.4 million compared to Dh108 million in Q1 2019.
The company said it had taken several health and safety measures since the start of the Covid-19 outbreak in China in January to protect the health and safety of its people, customers, operations, and other stakeholder groups.
CEO Bashar Obeid said: "Just like all businesses around the world, the onslaught of the COVID-19 pandemic is challenging our operations, business model and financial standing."
"But as an essential industry operating under such difficult and stressful circumstances it has also revealed the truly heroic efforts of Aramex employees and has demonstrated the resilience of our business as evidenced by the limited impact on total revenue," he stated.
"Our number one priority is the health and safety of our employees, customers and communities. As the pandemic spread across the world, we intensified our efforts to protect the health and safety of Aramex employees and other stakeholders," noted Obeid.
“From a business perspective, it is too soon to say with certainty how severe and lasting the impact of the pandemic will be on our business. However, in Q1 our revenue mix has shifted on the back of considerable changes in consumer shopping behaviour and e-commerce trends, and we saw an increase in the cost of doing business, he added.
Obei pointed out that over the period, international express and freight forwarding were negatively impacted.
The general softening in demand for goods, and more complicated and costly shipment routes have impacted its volumes and profit margins in those service lines.
In stark comparison, Domestic Express and Logistics and Supply Chain Management have witnessed significant increases in activity levels. This is mainly because almost entire populations in countries where we have significant on the ground operations were encouraged to turn to online channels to purchase and deliver necessities, such as food and other household goods, he stated.
"This has prompted major traditional retailers in our core countries to turn to Aramex to partly handle the influx of orders and deliveries and relieve pressure on their limited last mile capacities" noted Obeid.
"At the same time, major e-commerce players have also increased their demand on our services to support their last mile delivery requirements," he said.
“Over the period we have also intensified our commercial aspirations by targeting companies in the pharmaceutical, life sciences and healthcare sector. We are confidently servicing new clients and we expect to continue to see an increase in activity from those critical industries and sectors over the coming periods,” he added.
COO Iyad Kamal said: "Since the start of the Covid-19 outbreak in January, we had to rapidly adapt and address several operational hurdles and challenges which affected each one of our business lines."
He pointed out that international express and freight forwarding witnessed significant changes in line haul operations as a result of the interruptions in air travel and the changes in land border regulatory requirements, yet Aramex managed to stay operationally nimble, swiftly adapting to those changes.
"Domestic Express saw a spike in volumes which strained our last mile capacity in some key markets, however we were able, to a good extent and in a short period of time, to scale our last mile operations to cater to the increased demand in those markets," he noted.
Logistics and Supply Chain Management continued to perform exceptionally despite the challenges to staff scheduling and restrictive mobility, he added.-TradeArabia News Service
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