Aramex FY20 profit drops 43 pc to AED285 mn

BBN Report

COVID boosts top-line revenue

DUBAI/February 10-2021: Aramex, the leading global logistics and transportation solutions company, has reported net profit of AED285.01 million for the financial year 2020 (FY20) compared with AED497.40 million the company logged for the previous year – representing a decline of 42.70 per cent on that count.

The company has generated annual revenue of AED5.51billion against AED5.07 billion the company earned for the earlier year.

During the fourth quarter (Q4) of 2020, the revenue increased 13 per cent to AED1.60 billion compared with AED1.42 billion reported in Q4 2019.

COVID boosts top-line revenue

This marks the company’s highest fourth quarter revenue on record. Q4 is typically a busy shopping season and with more and more consumers turning to e-commerce to buy goods and gifts due to travel and other COVID-19 related restrictions, this supported Aramex’s top line growth for the three-month period. In 2020, the company’s cost base witnessed an unexpected increase as line haul costs – costs associated with long distance transportation – rose and the cost to scale last mile operations to accommodate the surge in Express volumes from e-commerce also increased.

Costs up

There was an increase in other costs related to COVID-19, including Personal Protective Equipment (PPE) for Company employees and sanitization of facilities and fleet.

Despite the increase in costs and after accounting for provisions, Aramex remains in a very strong cash position thanks to prudent financial management.

At the end of 2020, Aramex’s total cash stood at AED1.26 billion and free cash flow of AED441 million.

Moreover, the company said, the agreement to sell InfoFort will strengthen Aramex’s balance sheet and result in a more focused group, consistent with the company’s long-term strategy to focus its operations on the core logistics solutions services.

Captain Mohamed Juma Al Shamsi (seen in the picture), chairman of Aramex said that in 2020, Aramex demonstrated its operational resilience and agility to respond swiftly to fast-changing operational conditions.

Trusted brand

“Moreover, over the last 12 months, Aramex reinforced its reputation as a trusted brand that can deliver high levels of service in a reliable, safe and timely manner under unprecedented circumstances,” he added.

Thomas Kipp, Chief Operating Officer at Aramex, said, “While 2020 was riddled with operational hurdles, we managed to end the year on a strong footing. In Q4 we handled a record volume in Express shipments and witnessed a strong rebound in volumes in our International Express from the Q2 2020.

 

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