E-commerce, business transformation keep Aramex growing in 2019

Aramex

Dubai-based Aramex, global provider of comprehensive logistics and transportation solutions, announces a 1.0 per cent rise in 2019 net profit to AED 497.4 million (USD 135.35 million) with competitive pressures in its Asian e-commerce business offset by the GCC region, UK and US markets.

Full-year revenue increased by 3.0 per cent to AED 5.25 billion. In Q4 2018, Aramex registered a one-off impairment of AED 46 million from the divestment of Aramex Global Solutions (AGS).

The company remains in a very strong cash position at the end of 2019 with total cash standing at AED 1.0 billion and free cash flow of AED 294 million.

Commenting on the results, Bashar Obeid, chief executive officer of Aramex, says: “We are pleased with our resilient performance despite headwinds emanating from regional and global economic challenges and pricing pressure on our core business prompted by shifting e-commerce dynamics.

“In 2019, we strategically focused efforts on upgrading our operations and deepening our commitment to building a digital infrastructure that enables a higher service level to customers, more efficient processes to handle strong growth in shipment volumes and partial mitigation of impacts from pricing pressure, especially in our express business.”

More specifically, Aramex invested heavily in the last mile operations, the most competitive stage of the delivery journey. This help enable the company to become the leaders in last mile in its core markets, Obeid says.

“Simultaneously, we are fast tracking our commercial transformation process to encourage accelerated growth in our B2B business lines such as fashion retail, telecommunications, manufacturing, chemicals and healthcare, which will help us diversify our revenue mix.

“To extract more value from that business we are undergoing a restructuring of our commercial teams and processes, and expect it to increase its contribution to our performance in the coming quarters.”

For the full-year 2019 Aramex’s International Express business grew by 3.0 per cent to AED 2.35 billion, compared to AED 2.27 billion in 2018, most notably coming from US, UK, Singapore and Saudi Arabia.

In FY 2019 Domestic Express business grew by 5.0 to AED 1.11 billion, driven by the rise in domestic e-commerce across GCC and Australia. In Aramex’s core markets, Domestic Express shipment volumes rose by 27 per cent compared to 2018, namely driven by strong growth in Saudi Arabia and Egypt.

Aramex’s Freight-Forwarding business declined by 2.0 per cent to AED 1.14 million due to continued regional economic uncertainty.

Logistics and Supply Chain Management operations over the year increased 18 per cent to AED 355 million, due to the strong demand from traditional retailers for Aramex’s warehousing and other value-added services across key markets.

Commenting on the outlook for 2020, Obeid says: “While we anticipate shipment volumes to continue to demonstrate healthy growth in the coming year, notably from our core markets, pricing pressure on e-commerce business is expected to continue over the coming period.

“Our efforts in 2020 will be focused on accelerating our business transformation roadmap across different areas in the company to realise synergies and lower cost of doing business on the ground. We will also continue our aggressive roll-out of the commercial restructuring process prioritising the B2B segment, to ensure we have a well-diversified revenue mix.”

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E-commerce, business transformation keep Aramex growing in 2019
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E-commerce, business transformation keep Aramex growing in 2019
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Dubai-based Aramex, global provider of comprehensive logistics and transportation solutions, announces a 1.0 per cent rise in 2019 net profit to AED 497.4 million (USD 135.35 million) with competitive pressures in its Asian e-commerce business offset by the GCC region, UK and US markets.
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AsiaCargoBuzz.com
AsiaCargoBuzz.com
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