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Aramex Q1 2021 Revenues Jump 24%
Operating profit declines 20%
Aramex a leading global provider of comprehensive logistics and transportation solutions, has announced its financial results for the first quarter ending 31 March 2021.
In Q1 2021, Revenues jumped 24% to $388 million, compared to $313 million in Q1 2020 driven by increased demand for Express business including cross border e-commerce and last mile services.
Operating profit declined 20% to AED 79 million compared to $21million in Q1 2020, while Operating margins fell to 5.6% compared to 8.6% in the same period last year.
Q1 2021 EBITDA margins came in at 11.9%, down from 16.0% in Q1 2020.
The decline in operating profit and EBITDA was impacted by an increase in line haul costs on the back of global capacity constraints caused by supply chain disruptions the industry continues to face due to the pandemic.
The capacity shortage during the quarter was further exacerbated as the global Covid-19 vaccines transportation and distribution gathered pace.
Subsequently, Net Profit for the period decreased 32% to $12.5 million compared to $18.2 million in Q1 2020.
As a result of prudent financial management, Aramex maintained a strong balance sheet with a negative net debt position of $96 million, indicating a strong cash balance as at 31 March 2021.
This solid financial position enables the Company to continue investing in scaling operations, rolling out digital solutions and swiftly executing on future opportunities including value-enhancing acquisitions.
Bashar Obeid, Chief Executive Officer of Aramex, said: “We are incredibly happy to report that in Q1 2021 we witnessed revenue growth across all our business lines, an indication that the global economy is staging a gradual recovery and that business and consumer confidence is improving.
"We are very encouraged by the double-digit growth in our revenues which was predominantly driven by healthy increase in demand from cross border e-commerce and last mile services.
"The top line growth was also driven by strong recovery in our B2B services lines, particularly from the healthcare and FMCG sectors.
"Over the course of the quarter, we were well prepared to handle the surge in Express volumes with zero impact on our service standards thanks to our digitally-enabled, efficient and reliable operations, enhanced last mile infrastructure and dedicated teams working around the clock.
"However, the impact of Covid-19 continues to weigh on our operating margins because of relatively high line haul costs. The downward pressure on margins will likely continue for the remainder of the year."
Read More: Aramex Announces New Chief Executive Officer