Dubai: “The Gulf”
Aramex announced that the company’s revenue increased by 2% year-on-year during the first quarter of 2022 to reach 1.45 billion dirhams, driven by the strong performance of the freight and logistics services sector. The new business model introduced by Aramex, which focuses on improving operating efficiency and reducing costs, led to a 13% decrease in annual sales expenses, and a decrease of 1% in general and administrative expenses .
Net profit during the first quarter of 2022 increased by 3% year-on-year to AED 47 million. Excluding the negative impact of the write-off of the disposable technology, net profit from normal operations for the first quarter would have increased by 14% year-on-year to AED 52 million.
Aramex has maintained the strength and stability of its balance sheet, with a debt-to-equity ratio of 46.8%, in addition to the company’s holding a strong cash balance of 762 million dirhams as of 31 March 2022, which is its ambitious support support. plans to implement mergers and acquisitions, which are currently being studied.
Stable financial and business performance
Othman Al-Jeddah, CEO of Aramex, commented on the first quarter results: “We have registered a strong start to 2022 as Aramex has achieved stable financial and commercial performance as the company continues its ambitious growth strategy implement based on the new business model. We have begun to see significant stabilization in our profit margins, mainly due to the strategic decision we have taken to increase the contribution of our freight and logistics business to our revenue mix. This stability has also been driven by the improvement in the operating environment worldwide, in addition to the improvement of the efficiency of costs and operating processes in the activities of the express service sector. ”
He added: “We remain committed to providing the best services to our customers through our strategic investments, the most recent of which was investing in the development of our technical infrastructure worldwide, as we leverage our capabilities and readiness for peak times. the holy month of Ramadan, and we managed to handle a 15% increase in the number of shipments without any service interruption. Despite increasing inflationary pressures on our cost base, and continued fluctuations in supply chains in the face of geopolitical instability and pandemic-related downturn in Asia, we remain flexible and competitive to ensure that we continue to grow and maintain market share across business sectors , while it is the same to provide exceptional services to all our customers. ”
Express delivery services
The fast delivery services sector includes the sectors of international express services and domestic express services, and offers package delivery and delivery to the final destination that meets the needs of corporate clients for companies and companies for individuals. These solutions cover both “Store and Ship” service, e-commerce and consumer goods Fast trading, small and medium companies and others.
Revenue from express delivery services decreased by 9% year-on-year during the first quarter of 2022 to reach AED 911 million. This is due to the slowdown in cross-border express transport business compared to the same period last year, due to the return of travel activity, which negatively affected the levels of consumer demand for e-commerce. In terms of domestic high-speed revenue, it remained stable compared to the same period last year at 353 million dirhams.
Despite the decrease in shipments, the gross profit margin remained stable compared to the first quarter of 2021. This is due to improved costs and operational efficiency through warehouse automation, acceptance of AI solutions across the entire value chain, as well as the expansion of deliveries to The final destination to improve its efficiency through a network of approved locations to receive and deliver customer shipments and parcels, in addition to the “Aramex Spot” service and the “Aramex Fleet” platform.
Within the framework of the cooperation between Aramex and DBD Group, Aramex became the first company specialized in express services in Morocco to have the authority to manage express services by road freight from France to Morocco.
In turn, Alaa Al-Saudi, chief operating officer – Express, said: “The Corona pandemic was an exceptional event for Aramex, which brought about many unexpected changes during 2020 and 2021, and we saw sudden increases in the number of shipments as However, over the past three months, coinciding with the lifting of restrictions, the opening of markets in most countries around the world and the return of the majority of consumers to their previous shopping habits, all these factors have led to a decrease in the number of shipments within the international express service sector.On the other hand, domestic express operations performed very well and recorded a stable number of shipments handled.There is no doubt that our record of almost a similar number of shipments in predicts the first quarter of 2021 well for consumers to adapt to the new way of shopping locally, despite the return from life to normal, which will continue to sustain growth in this sector. ”
He added: “During the first quarter, we invested in various initiatives to support our growth strategy and continue our efforts to meet our commitment to enable and facilitate international trade. And we have introduced a new set of distinctive services in the countries of the Gulf Cooperation Council, in a step aimed at meeting the needs of these markets. In our international operations, we have continued to improve the infrastructure needed for deliveries to the final destination. In Europe, we have strengthened our cooperation and partnership with DBD Group in Spain and France, and we have also modernized our facility in the Czech Republic to serve as an outlet to Eastern Europe. In addition, we are currently working on opening new routes in North Asia to facilitate trade flows to South Africa and Australia. ”
Shipping and logistics services
The freight forwarding and logistics services sector includes air, sea and land freight services, warehousing and distribution solutions, and serves companies operating in various industries and fields including oil and gas, healthcare, pharmaceutical industries, aviation industries, retail, fashion and others.
The sector’s revenue increased by 28% year-on-year during the first quarter of 2022 to 503 million dirhams, driven by the strong performance of the freight services sector, in addition to the continued growth of the logistics sector at a steady pace.
In the first quarter of 2022, the freight services segment recorded a 36% year-on-year revenue growth to reach AED 391 million, mainly due to strong demand from small and medium-sized companies, and the remarkable recovery in the oil and gas sector . The freight service sector has also benefited from the restructuring of the work teams and the recruitment of more specialists.
The integrated logistics and supply chain management sector experienced revenue growth of 7% to 112 million dirhams during the first quarter of 2022, due to the increase in retail activities, business growth of customers in the oil and gas sector, and the resort of more consumer products companies to expand its presence by relying on e-commerce platforms.
Mohammed Al-Khas, Chief Operating Officer – Logistics, said: “We have maintained our growth momentum over the past three months. Thanks to our new business model, we have improved our expertise and understanding of various business sectors, market dynamics and customer needs. By improving our capabilities, we have managed to gain significant market share across various key sectors, including oil and gas, while designing and providing customized solutions for small and medium-sized businesses. ”
He added: “In the coming stages, we will continue our commitment to accelerate the pace of our growth plans by implementing initiatives to reduce costs, improve operational efficiency, attract more specialists, benefit from appropriate data systems and our network of partners in the freight services sector. “
Abolition of foreign ownership
Aramex’s board recently adopted a decision to increase the percentage of foreign ownership of the company’s shares to the upper limit of 100% from the current 49%, making Aramex the first local Emirati company to be listed on the Dubai Financial Market is listed to allow foreign investors. full ownership of its shares available for trading.
As it is included in the FTSE Emerging Markets Index and MSCI’s Small Cap Emerging Market Index, this move is expected to increase the weight of Aramex’s shares within these indices, thus increasing inactive investment flows of funds that remain on top of the mentioned indicators. .
Commenting on Aramex’s expectations for the remainder of 2022, Othman Al-Jeddah said: “Given the rising inflation rates and the challenges and ongoing changes in the macroeconomic environment, we will continue to focus on providing outstanding value. to our customers, partners and shareholders. We have developed a well-thought-out and clear roadmap for all our business sectors, and we are confident that Aramex will be able to build on the strong momentum we achieved during the first quarter. We will benefit from the strength and stability of our balance sheet, our low debt and the strength of our cash position to move forward with acquisitions that bring us more value throughout the year and ensure the implementation of our global growth strategy. We are also looking forward to exploring and seizing more fruitful collaboration opportunities with our strategic shareholders, Abu Dhabi Ports and Geopost / DBD Group. ”
Dubai: “The Gulf”