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Aramex posts 15% net profit surge in 2014
Aramex, listed on Dubai bourse, said it made a net profit of Dh318 million in 2014 compared to Dh278 million in 2013.
Aramex operates in 60 countries and leads an alliance of 40 independent couriers worldwide. — Supplied photo
Dubai — Leading Dubai-based courier Aramex reported on Thursday a 15 per cent surge in 2014 net profit, and forecast a further a 10 per cent growth in net earnings in 2015 on the back of a thriving e-commerce sector and lower oil prices.
Aramex, listed on Dubai bourse, said it made a net profit of Dh318 million in 2014 compared to Dh278 million in 2013. For the fourth quarter, courier reported a net profit growth of 17 per cent to Dh89.4 million. It fourth-quarter revenue was Dh959 million, 13 per cent higher than a year earlier.
Addressing a Press conference in Dubai, Aramex CEO Hussein Hachem said a further drop in oil prices would contribute to an estimated 5-10 per cent reduction in the firm’s freight costs. He also indicated that the courier company is targeting two to three acquisitions that are a “strategic fit” in 2015.
In December 2014, Aramex bought the master franchise for South African retailer PostNet for $16.5 million from OneLogix Group as part of its expansion in Africa.
Hachem said his 2015 profit forecast for Aramex would depend on the impact of oil prices and the euro. “We have been watching the oil prices intently. Our business depends on airlines and we have a massive fleet of delivery vehicles. Our airline costs are dropping…freight costs are cheaper.”
Hachem said being a global firm, lower freight costs obviously benefit Aramex globally. “Of course it remains to be seen how much do airlines cut costs. It is already happening though and we are passing on the benefit to our customers,” he added.
Aramex, which operates in 60 countries and leads an alliance of 40 independent couriers worldwide, pledged that it would pass on the benefit of the reduced operating cost to customers by cutting its fees.
“Our performance was driven by solid revenue growth primarily in international and domestic express, as well as the continued expansion of our e-commerce platform across key growth markets,” Hachem said. Iyad Kamal, COO of Aramex, pointed out that the firm’s e-commerce business has been growing over the last four to five years and is becoming a significant driver of its revenue growth.
“Our B2B business is growing faster than our B2C business. As of now, e-commerce is growing 30 per cent year-on-year within Aramex and we expect that growth rate is maintained,” he said.
Chief Financial Officer Bashar Obeid told reporters Aramex would sign a $150 million, five-year loan with local banks in next 10 days and would use the money to help fund expansion and acquisitions. “We have a very low debt-equity ratio of eight per cent and banks have shown their willingness to lend to Aramex. We should be signing documents to this effect in the coming 10 to 15 days,” he said. This extra capital would be used to fund Aramex’s inorganic growth strategy as the firm was looking at 2-3 acquisitions in 2015.
Aramex, which competes with global giants such as DHL and FedEx, has been focusing on expanding in Africa; it acquired South African logistics and transportation company Berco Express Ltd in 2011. It latest acquisition PostNet provides courier, printing and copying services, plus stationery and mailboxes, to individuals and businesses and has 287 stores in South Africa.
— issacjohn@khaleejtimes.com
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