Aramex Nine-month 2021 Revenue Increases 14% to $1.21 Billion
Aramex a leading global provider of comprehensive logistics and transportation solutions, has announced its financial results for the third quarter and nine months ending 30 September 2021.
In Q3 2021, Revenue was stable YoY year at $400 million, driven by double-digit growth in Domestic Express and a strong rebound in Logistics & Freight-Forwarding business.
It is worth noting that last year witnessed an exceptional surge in revenue due to Covid-19 related lockdown and curfew measures.
In nine-month 2021, Revenue increased 14% YoY to $1.21 billion, compared to $1 billion in the same period in 2020, driven by growth across all service lines in both the Courier Business, and Logistics & Freight-Forwarding business.
The Company benefitted from shifting consumer trends to online shopping and recovery in global business activity post Covid-19, especially in the oil & gas and retail sector.
Meanwhile, operating profit fell 19% YoY in Q3 2021 to $18.5 million, and operating profit margin dropped by 1% compared to Q3 2020.
Excluding the one-off events, Q3 2021 operating profit fell 55% YoY. Overall costs across the business rose as the Company continued to build scale and increase capacity to handle the growth in shipment volumes.
For the nine-month period, operating profit fell 20% YoY to $67 million, with operating profit margin decreasing slightly by 2% compared to the corresponding period in 2020.
Net Profit for Q3 2021 rose 47% to $18.5 million compared to $12.5 million in Q3 2020. However, excluding one-off events in both years, normalized net profit for the three-month 2021 period declined 70% YoY to $8 million compared to $27 million for the same period last year.
Nine-month 2021 net profit decreased by 14% to $48.7 million, compared to $56.6 million in 9M 2020.
Excluding one off items in both years, normalized net profit for the nine-month period decreased 46% YoY to $38.4 million compared to $71.6 million for the same period last year.
The boom in e-commerce activity continued to build momentum across all regions, driving a 13% YoY increase in Q3 2021 Revenue to $107 million and 6% increase in volumes.
Of note, was the strong growth in activity in Saudi Arabia, New Zealand, and Australia. For the nine-month period, Domestic Express produced a 14% YoY increase in Revenue, to $30 million.
As a result of prudent financial management, Aramex maintained a strong balance sheet with negative net debt position of $97.2 million, representing a strong cash balance as at end 30 September 2021.
Othman Aljeda, Group Chief Executive Officer, Aramex, said: “The impact of our new redesigned operating model is already starting to reflect positively on our performance.
"With a renewed emphasis on enhancing operating efficiencies, improving service levels to customers, building scale and reorganization of our team of professionals, we have been able to capture growth opportunities in both the Courier Business, and Logistics & Freight-Forwarding business.
"Over the last few months, we have witnessed an almost complete return to pre-Covid operating environment and are noticing a few trends that we believe will continue to shape the future of our business and drive our growth strategy.
"For our Courier Business, we are seeing a surge in domestic express volumes driven by a significant increase in number of retailers opting to tap online sales channel to satisfy the needs of shoppers that have now increased expectations to buy all products, from necessities to luxuries, online.
"Notably, we are seeing very strong growth for our business in Saudi Arabia, where we have been and will continue to invest in expanding and ramping up our operations.
"We are also seeing increased competition in the last mile across all our geographies, especially from relatively smaller and new players in the market.
"However, with our expertise, scale, strong network, technology-enabled operations, user-friendly customer applications, and strong financial position to fund the expansion of our ground operations, we are well-positioned to continue consolidating our leadership position in last mile solutions within our core markets.
"On the B2B side, we are deepening our expertise, leveraging our strategically located hubs and global network to customize our offerings in response to customer needs. This has enabled us benefit from the uptick in global economic activity."
Commenting on the outlook for the remainder of 2021, Othman Aljeda said: “As we approach the busiest period for the Courier Business, we are very well prepared to handle the expected surge in volumes and are especially focusing on enhancing our responsiveness to customer needs and demands.
"While the world returns to relative normalcy, we remain very committed to ensuring the priority of the health and safety of our employees, customers and communities.
"Looking ahead I am very excited with how much potential our new redesigned operating model will enable us to unlock opportunities for our shareholders and wider stakeholders.
"We believe we will continue to unlock opportunities and build scale while remaining agile, asset light and financially flexible. We will also further diversify and strengthen our global network to remain resilient to economic cycles and supply chain disruptions.”