Non-recurring events dent profit to a good extent
DUBAI/November 5-2020: Aramex reported a 58.75 per cent decline in its net profit for the third quarter (Q3) ending September 30, 2020 to AED47.17 million compared with AED114.35 million the company reported for the same period last year.
The contraction in Q3 profit of Aramex, a leading global provider of comprehensive logistics and transportation solutions, can to an extent be attributed to a non-recurring provision.
Aramex’s Q3 2020 revenue increased by 19 per cent to AED1.51 billion compared with AED1.27 billion in Q3 2019. Top line rose across most of the company’s business lines, with International Express rebounding from the previous quarter.
Revenue for the nine-month period ending September 30, 2020 increased by 7 per cent to AED 4.04 billion, compared with AED 3.78 billion in the corresponding period of 2019.
Blasts, fire dent profit
Excluding the non-recurring provision booked during Q3 due to the damages caused by two major incidents, namely Lebanon’s blast and the warehouse fire in Morocco, net profit would have been down by only 13 per cent year-on-year to AED 99.1 million.
Net Profit for the nine-month period decreased by 40 per cent to AED208 million compared with AED344.94 million in the prior year period.
Excluding the provision, nine months’ net profit would have been AED260.89 million, a 24 per cent decline from AED344.94 million made in the same period last year.
Bashar Obeid (seen in the picture), Chief Executive Officer of Aramex, said the company had a very strong set of results over the three-month period, achieving the highest Q3 revenue on record supported by growth across most of our business lines.
“Covid-19 has accelerated growth in the e-commerce industry, which remains the dominant driver of our top line growth. We also managed to capture new opportunities from other industries, namely healthcare and pharmaceutical as well as retail and food and beverage,” Obeid said.
The company said Covid-19 has also increased its overall operating costs across multiple parts of the business including costs related to scaling last mile operations and cross border transportation.
Saudi, UAE remain core markets
Othman Aljeda, Regional CEO for Aramex in Europe, North America and Asia, noted that the company experienced an exceptional 35 per cent growth in total volumes over the period, with the majority of the contribution coming from the core markets including Saudi Arabia and UAE.
“Over the period, we continued investing in our last mile infrastructure to support the strong growth in e-commerce activities including hiring more couriers, increasing our fleet, expanding our warehouse capacity and upgrading our clearance gateway capabilities,” Aljeda added.