Aramex generated revenue of AED 1,425 million (almost US$388 million) in the final quarter of its 2018 financial year (October-December), an increase of 8% on the same period a year earlier largely due to double-digit growth in its International Express business.
Net profit decreased by 7% to AED 154 million but excluding the one-off impairment of AED 46 million from the divestment of its full 60% stake in Aramex Global Solutions (AGS) to Australia Post during the quarter would have shown a rise of 21% to AED 199.7 million, the Middle East-based express and logistics provider said.
2018 full year revenue increased by 8% to AED 5,086 million while net profit increased by 13% to AED 492.6 million. Excluding the one-off impairment from the divestment of AGS, the company’s 2018 net profit would have increased by 24% to AED 538.3 million compared to the prior year.
Commenting on the results, Aramex CEO, Bashar Obeid, said: “We are very pleased to report one of Aramex’s most profitable years. Our 2018 financial results reflect the success to date of our digital transformation efforts and the strong growth experienced across all verticals, particularly within our International Express business, which has been well positioned to benefit from the global boom in e-commerce.
“Throughout 2018 we continued to invest in creating a leaner, more efficient business and transforming our overall operations. This work has paid off and ultimately expanded both our top and bottom line while significantly upgrading our service level to our customers.”
For his part, chief operating officer, Iyad Kamal, described 2018 as a “transformational” year for Aramex during which it had reaped the rewards of a new strategy through improved efficiencies and enhanced customer experience.
“We upgraded our service levels by increasing last mile capacity, enhancement of our next day delivery services within most of our core markets and digitizing the end-to-end shipment journey. Moving forward, we will continue to leverage new innovations such as Aramex Fleet, our crowdsourcing model; and WhatsApp for Business, to create more personalized interaction channels with our customers that deliver the transparency, visibility and flexibility they demand.”
One of the key highlights of 2019 will be focusing on operations optimization by introducing new operational methods and processes that will further improve Aramex's service levels throughout all key verticals,” Kamal added.
Among the highlights of the final quarter of last year was 15% revenue growth in Aramex's International Express business to AED 702 million, attributed to the significant growth in cross-border e-commerce across all regions.
Revenue from the Domestic Express division dropped by 1%, to AED 270 million, despite “excellent growth” in the GCC region and Africa. The overall performance was impacted by the strategic downscaling of the company’s operations in India as part of restructuring efforts.
Revenue from Aramex's Freight Forwarding activities declined by 4%, to AED 293 million but its oil and gas business in the GCC and Asia registered double-digit growth. The company continued to diversify across different geographies and strategic sector verticals, setting the foundation for a steady projected growth in the coming quarters.
Turnover from Aramex’s Logistics and Supply Chain Management business increased by 23% to AED 84 million, growth largely fueled by the rise of omni-channel sales from traditional retailers in the GCC.
Over the full year 2018, Aramex's International Express business grew by 13% to AED 2,273 million, as an increasing number of customers across all regions expanded their e-commerce business activities.
Revenue from Domestic Express was up by 3% to AED 1,051 million, driven by the rise in domestic e-commerce across GCC and Africa. Without the strategic downscaling of operations in India as part of restructuring efforts, which over the longer term will ultimately have a positive impact on the bottom line, turnover would have grown by 8% in 2018.
Freight-Forwarding's turnover increased by 1% to AED 1,164 million, mainly attributed to the growth in the oil and gas vertical predominantly in GCC and Asia.
Logistics and Supply Chain Management operations grew by 16% over the year to AED 302 million, due to the strong demand for Aramex’s warehousing and other value-added services across key markets.
Commenting on the outlook for 2019, Bashar Obeid noted: “We finished 2018 on a very positive note, resulting in one of our strongest financial years to date. In 2019, we will remain focused on implementing a lean and efficient business model, enabling Aramex to remain resilient against global geo-economic challenges. We will also remain open to unlocking opportunities in new sectors and geographies, particularly in specialized industry verticals where we see strong demand, to further enable B2B growth.”
He added: “We are well positioned to benefit from the ongoing growth of the global e-commerce industry and will continue to ensure that the business remains diversified and efficiently operated, with a strong focus on improving last-mile delivery.”
