Aramex sees gains on revenues, but third quarter 2020 net profit down over higher provisions

Dubai: Ecommerce demand was again the fuel for Aramex’s 19 per cent gain in third quarter revenues to Dh1.5 billion, from Dh1.2 billion a year ago. In a big positive, higher margin international express freight services saw a “rebound”.

But net profit took a hit, by 59 per cent, to Dh46.2 million in the July to September period, compared to Dh113.8 million a year ago. Revenues for the nine-month period was higher by 7 per cent to Dh4.03 billion, and a sharp gain on the Dh3.78 billion from same period last year.

“Global business activities have generally started to pick up with COVID-19 related lockdowns, mobility restrictions and border closures easing over the three-month period,” the company said in a statement.

Net profit would have been higher if it were not for higher provisions – from the Beirut Port blast and a warehouse fire in Morocco. “Net profit would have been down by only 13 per cent year-on-year to Dh99.1 million,” the statement said.

Net profit for the nine-month period was down 40 per cent to Dh208 million. Bashar Obeid, CEO, said: “We witnessed a very strong set of results… achieving the highest Q3 revenue on record supported by growth across most of our business lines.

“COVID-19 has accelerated growth in the e-commerce industry, which remains the dominant driver of our top-line growth. We also managed to capture new opportunities from other industries, namely healthcare and pharmaceutical as well as retail and food and beverage. This has enabled us to further diversify our revenue mix.”

COVID-19 has also increased our overall operating costs across multiple parts of our business including costs related to scaling last mile operations and cross border transportation

Bashar Obeid of Aramex