Aramex recorded net profit growth of 19% despite a 6% drop in revenues for the three months endingMarch 31, 2009, due to the global economic slowdown.
In the first quarter of 2009, the company increased its net profits by 19% to AED 43.1million (€8.86 million) compared to AED 36.2 million (€7.44 million) during the correspondingperiod last year.
Aramex said that its strong financial performance reflected the adaptability of itsasset-light business model and its ability to quickly adopt cost-efficient programs duringprolonged economic downturns.
The company’s Q1 revenues, however, dropped 6% from AED 494.5 million (€101.65 million) to463.4 million this year (€96.25 million). The decrease was driven by a significant global slowdownin trading activity and a fall in worldwide industrial output. Despite the decreased revenues,Aramex profited from the depressed climate reducing costs by negotiating better rates with itsmajor suppliers, the company said in a statement.
Whereas Aramex registered an overall drop in revenues, it recorded a 5% revenue increase inthe GCC boosted by growth in domestic and international express services, and despite adouble-digit drop in freight forwarding revenues. The company’s strong financial position is backedby AED 342.8 million (€70.46 million) in cash and a very low debt position.
The slowdown in global trade had an especially significant impact on the company’s freightactivities, particularly Aramex’s European and North American operations. Freight revenues declinedby 20% to AED 174.5 million (€35.87 million) in the first quarter of 2009, compared to AED 218.8million (€44.97 million) during the same period last year.
Despite the general decline in business, International express revenues grew by 4% in thefirst quarter of 2009 driven by the company’s strong performance in e-commerce and relativelystable prices in its core markets including the Gulf and Near East. On the domestic market, Aramexrecorded sound growth in its core markets of GCC and the Near East with revenues growing by 10% inthe region.
InfoFort, the company’s document management services division, continued to perform aboveexpectations in the first quarter of this year. That performance was further supported by theacquisition of Metrofile Middle East, a UAE-based document and records management company, whichcontributed to the considerable growth in InfoFort’s organic operations.
“The past two quarters, which have witnessed a global financial meltdown, a very seriousslump in worldwide trade, and very low levels of consumer confidence, have tested our ability todeliver the results expected of us by our stakeholders,” said Fadi Ghandour, founder and CEO ofAramex. “During this period, we needed to stabilise the business while continuing to deliver thesame high-standard services to our clients. At the same time, we needed to reassure our ownemployees, and to let the market know that our asset-light business model is at its best when it istested – as in these turbulent times.”
Ghandour continued: “It is important to note that an accelerated trend in outsourcinglogistics services across the Gulf is now clearly apparent, prompted by clients revisiting theircost structures and needing to streamline their supply chain. Aramex continues to benefitsubstantially from this new trend and, more generally, remains focused on meeting the evolvingneeds of our clients by developing and customizing our service offerings, and empowering ouremployees across the network.”
