Revenues also grow by 4% to $336 million
Aramex has announced its financial results for first quarter ended 31 March 2019.
Aramex’s Q1 2019 Revenues grew by 4% to $336 million, compared to $324 million in Q1 2018.
Revenues would have grown by 8% excluding the impact from currency fluctuations, mainly in the Libyan Dinar, South African Rand and Australian Dollar; and the company’s strategic restructuring of its domestic operations in India.
Net Profit for the quarter rose by 4% to reach $29.4 million, compared to $28 million in Q1 2018.
Net profit was negatively impacted by the amount of $2.89 million due to the implementation of IFRS16 and currency fluctuations.
However, Aramex’s strategic restructuring of domestic operations in India delivered a positive contribution of $1.82 million to net income. Excluding those impacts, the bottom line would have grown by 8%.
Commenting on the results, Bashar Obeid, Chief Executive Officer of Aramex, said: “We continue to benefit from the healthy growth in global e-commerce volumes.
“However, we have started witnessing pressure on International Express margins due to lower and more competitive pricing.
“Our key priorities for this year are to continue to invest in upgrading our service level across all our core markets, while progressing aggressively in executing our digital transformation roadmap.
“This will help us boost operational efficiencies to cater for rapidly changing e-commerce business requirements, including faster shipping and delivery solutions at lower costs.”
Iyad Kamal, Chief Operating Officer at Aramex, added: “In Q1 2019, we continued to improve operating efficiencies and accelerated our digital transformation efforts in order to enhance service levels, especially in the last-mile delivery.
“These initiatives will help us win in the long-term, as we will be able to handle more capacity more efficiently and at a lower cost.
“We also launched our new, partially automated fulfilment center at Dubai Logistics City, which has improved our logistics and supply chain management solutions and offering.
“Our operating expenses have increased by 8% in Q1 2019 following the expansion of our infrastructure in key markets like Saudi Arabia.
“Today, we have more than 150 pick-up points across Saudi Arabia with aggressive plans to further expand our presence, in an effort to make it as convenient as possible for customers to pick up their packages and ship with Aramex.”
Aramex's cross-border International Express business grew by 7% to $145 million thanks to continuous growth in cross-border e-commerce in Turkey, Asia and North America. Shipment volumes surged by 22% in Q1 2019, yet lower margins prevailed.
The Domestic Express business dropped by 3% to $70 million, due in large part to the strategic restructuring in India and fluctuations in foreign currency, mainly in the South African Rand and Australian Dollar.
Excluding those factors, the business would have grown by 7%. The e-commerce Domestic Express business performed very well in GCC markets, and registered double-digit growth especially in Saudi Arabia and the UAE.
Commenting on Aramex’s outlook for the remainder of 2019, Bashar Obeid said:
"We continue to maintain a positive outlook for the remainder of the year.
“However, the fast-changing landscape means that we will have to grow market share by being more competitive with our pricing, more efficient with our offerings and exceling at the quality of our service.
“We are also optimistic about the opportunity to expand our logistics and supply chain solutions in the region.”