Aramex posted a 2% decrease in its net profits last year while its Q4 net profits fell dramatically by 36%, following record profits for ten consecutive years, with annual revenues also growing much more moderately than last year.
For the year ended 31 December 2015, Aramex’ net profits dropped 2% to AED 311 million (€77.5 million), compared to 2014. Its net profits during the fourth quarter of 2015 reached only AED 57.6 million (€14.4 million), which represents a 36% decline compared to Q4 2014.
Aramex commented on the strong Q4 decline: “This decrease is due to a one time provision to account for an employees’ incentive scheme in order to retain and reward talented and senior executives, in-line with international best practices. This scheme has been discussed, reviewed and approved by the Remuneration Committee of the company. Excluding this scheme provision, Aramex’s Q4 2015 net profit would have been approximately AED 104 million, which represents 16% growth over the same quarter last year. Also, full year net profits would have been approximately AED 358 million for the year 2015, which represents 12% growth over year 2014.”
The annual revenues of the Middle-East based express operator increased by only 5% to AED 3,837 million (€956.1 million) compared to 2014 when Aramex posted a much higher revenue growth rate of 10%. The Q4 revenues also rose by 5% to AED 1,003 million (€249.9 million). “Exposure to major currency fluctuations, primarily the Euro, South African Rand and Australian Dollar, had a 4.4% negative impact on full year revenues, which would have resulted in an increase of 9.4% in total annual revenues and 8.5% increase in Q4 revenues,” Aramex explained the relatively low revenues.
Commenting on the results, Aramex CEO Hussein Hachem said: “We had another strong year and we are very happy with our 2015 results. Despite global economic uncertainty, substantial drop in oil prices and currency fluctuations, our 2015 performance was very solid in revenue growth, primarily in international and domestic express, led by continued expansion of our e-commerce business across key growth markets. Aramex has also achieved solid growth across its geographies, with the GCC remaining the largest contributor to revenues in 2015. ”
“Net profits were affected by a one-time provision for our incentive scheme for key Aramex employees. Excluding the impact of this provision, our net profits were strong – witnessing 12% growth from 2014’s full year financial results – and are reflective of an ever increasingly, fundamentally robust business model and approach to the way we do business worldwide. We are excited about the positive growth trajectory we are on and will carry this momentum into 2016,” Hussein added.
Aramex’s International Express business recorded a strong performance in Q4 with revenues growing 14% to AED 382 million, mainly driven by robust e-commerce growth in Aramex’s core and growth markets and supported by the solid performance in the sector in Europe, the USA and the Middle East.
The Domestic Express business saw revenues of AED 211 million in Q4, which represents an increase of 4% from Q4 2014. This is due to increased demand for Aramex domestic services for both businesses and individuals in key markets. “Excluding currencies fluctuations which mostly resulted in South Africa and Australia, Domestic Express revenues grew by 12% in Q4 2015 compared to same quarter last year,” the company explained.
The Q4 revenues of Aramex’s Logistics and Supply Chain Management division decreased by 2% in Q4 to AED 52 million, while its annual revenues grew 4% to AED 206 million.
Freight Q4 revenues decreased by 5% to AED 298 million, with full-year revenues being down 3% to AED 1,203 million. Despite growth in volumes, freight revenues were affected by lower selling rates, driven by lower oil prices and global currencies fluctuations.
Looking ahead to 2016, Hachem said: “I am delighted to say that 2015’s fiscal performance prepared us well to execute our 2016 plans. 2015 was an important year for us to lay the groundwork for launching major initiatives which we are going to activate in 2016. While we continue to closely monitor global oil prices and currencies, we feel optimistic towards the outlook of 2016. We have already had a very exciting start by announcing the full buyout of Fastway Couriers’ operations in New Zealand and Australia. This was our biggest acquisition to date and will play a major role in expanding our reach and services to more customers worldwide.”
“We will continue to look for future acquisitions in our key markets while exploring more ways to enhance our e-commerce platform through improved transit times due to the continued boom in cross-border e-commerce. We will soon be launching our new innovative app that will give the power to customers through higher visibility, payment flexibility, more locations delivery options and a rating system. We will also be unveiling soon a new Rapid Scaling Up model based on partnerships in cities around the world giving us access to delivery partners thanks to our innovation and technology,” he added.
Hachem concluded that the company is committed to becoming a “technology-based enterprise” and will continue using innovative technologies to maintain its position as a “dynamic and disruptive global logistics player”. “We have a busy year ahead and all of these activities will help achieve growth in 2016 and beyond.”
