The Middle East’s largest express and forwarding group, Aramex, has reported double-digitrevenue growth and a modest increase in first-quarter profits, despite the instability in several
of its key regional markets.Revenues for the Dubai-listed group increased 12% to AED 595 million (€110 million) in the threemonths to 31 March, similar to the rate achieved in 2010. However, a net income increase of 5% toAED 49.8 million was substantially below the 11% net profit growth achieved last year.
Founder and CEO Fadi Ghandour said the company had witnessed “challenging conditions” in thefirst quarter of this year in several Middle East and North Africa (MENA) markets, such as Egyptand Bahrain, and the company had also suspended its operations in Libya, where they were likely toremain so for some time. He acknowledged that the growing social unrest in Syria was also a concernfor the company’s activities there. “Operations are normal in most parts right now, but we areconcerned,” he said.
But Ghandour stressed the group was “very pleased” with the results overall, which he said weredriven by strong performances in the Gulf Cooperation Council countries, where revenues hadexperienced a substantial increase since the beginning of 2011. “All our product offerings were inpositive territory; I am especially encouraged by the double-digit growth in our internationalexpress business, which is the biggest contributor to our operating income,” he said.
The continued growth of Aramex’s business in Europe and the recent acquisitions in Africa andAsia contributed to the company’s positive overall performance. “As we continue to expand ourpresence around the world, capturing growth opportunities in emerging markets in Africa andSoutheast Asia, Aramex’s position here in the Middle East remains consistently strong,” saidGhandour.
Although the continuing challenges in certain MENA countries were likely to dampen growthprospects for that region to some extent in the coming months, other Gulf markets have continued togrow, despite the uncertainties, and the company had continued to gain new clients, said Ghandour. “ UAE and Saudi Arabia continue to be our strongest markets,” he added.
The Aramex founder and CEO predicted “very low double-digit growth” this year, similar to thelevels achieved in the first quarter, of around 10-12%. “Amidst regional political instability,higher fuel prices and global inflationary pressure, our outlook for the rest of this year remainscautious,” he said. “However, our healthy performance in the first quarter is a clear indicatorthat Aramex continues to successfully adapt to rapidly evolving market conditions.”
Ghandour added that Aramex remains committed to its long-term expansion strategy, with furtheracquisitions expected in East Africa and Central Asia, following on from the two companies that itacquired in Kenya in February – OneWorld Courier and In-Time Couriers. He told Reuters that he waslooking at two to three further acquisitions this year, and looking particularly at opportunitiesin Africa.
Aramex has been expanding aggressively for several years, with acquisitions of express andfreight forwarding companies in Europe, Asia, and Africa helping to drive consistent double-digitrevenue growth. In addition to the two Kenyan acquisitions, Aramex also bought the Irish freightforwarding company Aquaship Agencies in February to further strengthen its presence in the Irishmarket and expand its ocean freight capabilities in Europe.
This was the latest in a series of recently completed international partnerships andacquisitions, including companies in Turkey, Malaysia, Bangladesh, and Vietnam.
