Aramex records double digit revenue growth

Published: Thursday, October 6, 2016

Aramex, a leading global provider of comprehensivelogistics and provider of comprehensive logistics and transportation its financial results for the second quarter of 2016. Aramex’s net profits increased by 36 per cent to AED 125.7 million, up from AED 92.5 million in Q2 2015. Revenues were also up 17 per cent, to AED 1,105 million compared to AED 946 million over the corresponding period of the previous year.

Aramex’s half year revenues increased year-on-year to AED 2,134 million, up 15 per cent compared to AED 1,856 million for the corresponding period of 2015. Net profits during the same period rose to AED 222.5 million, up from AED 179.2 million in the first half of 2015, a year-on-year increase of 24 per cent.

Overall net profits registered double-digit growth, impacted by a one-time fair value adjustment related to Aramex’s investment in AMC Logistics joint venture in Egypt amounting to AED 41.6 million.

Commenting on the results, Hussein Hachem, Aramex CEO said: “We are pleased with our Q2 financial performance. Despite global economic uncertainty, continuing oil price volatility and currency fluctuations, our results for the quarter were strong. However, though we finished strongly, we experienced slowing growth at the end of the quarter. We are closely watching this trend so we can quickly adjust to further volatility and remain cautiously optimistic about continuing our growth momentum into the second half of 2016.”

Aramex’s strong revenue performance in Q2 was driven by growth across most of its geographies. Europe, Asia and Australia were the biggest contributors to growth, with the recent acquisition of Fastway Couriers contributing significantly to revenues. The wider Levant region also grew at a healthy rate while in the GCC we witnessed a relatively flat growth.

Strong revenue growth was also recorded in Q2 from the International Express business, primarily in the U.S., Europe and Asia regions, due to a continued increase in demand for cross border e-commerce shopping services. Growth in the Freight business remained relatively stagnant as a result of the drop in global oil prices and currency fluctuations.

Aramex remains confident about extending its growth momentum and performance into the remainder of 2016. While the global economic outlook is uncertain, it will continue to invest in its business by leveraging disruptive and innovative technologies. As part of its Rapid Scaling-Up Model, which was developed to help leverage more partner- ships with delivery businesses and improve its last-mile delivery solutions, Aramex invested in a number of mobile- based start-ups this year in various global markets.

Partnering with what3words

Furthermore, Aramex announced it has invested US$2.94 million as part of a US$8.5 million Series B funding round with what3words, the multi-award winning addressing platform. This investment comes to further enhance Aramex’s global e-commerce operations. Previous investors, Intel Capital and British funds Force Over Mass and Mustard Seed also contributed to the deal.

what3words is an address system based on a global grid of 57 trillion 3mx3m squares, where each square has a unique pre-assigned 3-word address. The solution helps everyone who needs to find or share a location – whether they are navigation apps, governments, logistics firms, travel guides or NGOs. Aramex will use the “what3words” address system in its e-commerce fulfilment operations across the Middle East, Africa, and Asia to further enhance its last-mile delivery solutions.

Not finding the right delivery point, for example, is frustrating for consumers, and costs businesses a huge amount in failed deliveries and delays. The ‘last-mile deliveries’ account on average for 28 per- cent of all delivery costs. According to the UN, 135 countries don’t have an adequate address system. This puts huge pressure on the logistics industry to find effective and efficient solutions to deliver parcels to consumers.

Aramex’s investment and implementation will rapidly extend what3words’ growing reach in the delivery, logistics and courier industries. what3words is already being used by many organizations to better coordinate their projects and services and increase efficiency. Notable integrations include navigation software platform Navmii, Norway’s National Mapping Agency, The United Nations data collection app UN-ASIGN, and the world’s largest geographic software providers including Esri, Safe Software, and Boundless.

Already available in 10 languages and used in more than 170 countries, what3words will use the new investment to launch its voice recognition product in the smartphone, wearables, and automotive sectors and develop its 3-word address system in several Asian languages. The investment will also support the growth of its team and further global expansion.

New Smartphone App

In addition, Aramex has officially launched its new smartphone app to UAE customers. The app will ultimately be available for Aramex customers across all markets the company operates in. Customers in the UAE can now use the new app to easily track and m a n a g e t h e i r shipments. The app offers six unique features making the overall customer service experience quicker, easier and more enjoyable.

This includes phone tracking, package visibility, in-app payment, delivery scheduling, live tracking and a courier rating system to asses overall satisfaction. The use of the new Aramex app gives customers more power and control over paying for, tracking and receiving shipments, with instant access to updates available on their smartphones. All Aramex customers need to do is download the free app on their smartphones, create an account by entering their mobile number and shipping address. Once set up, their information will be automatically populated and stored.

Following its launch in the UAE, the app will soon be available in other markets where Aramex operates, both regionally and globally. Saudi Arabia, Egypt, South Africa, India and Australia will be priority markets for introducing the app. The app will also be the cornerstone of Aramex’s “Rapid Scaling-Up” Model, which the business plans to unveil soon, and will support it in leveraging more partnerships with delivery
businesses worldwide, extending its global reach and improving delivery transit times.

Nearly 73 per cent of the UAE population used a smartphone this past year, according to estimates, making it an ideal market for Aramex to launch its app. This figure puts the UAE in the number one spot for mobile phone user penetration among countries in the Middle East and Africa and one of the most attractive retail destinations worldwide. Its e-commerce market alone is predicted to witness double-digit year-on-year growth. This positive growth trajectory presents significant opportunities for logistics companies to continue to source more delivery solutions that match customer preferences, one of which includes Aramex’s new smartphone app.

Established in 1982 as an express operator, the company rapidly evolved into a global brand recognized for its customized services and innovative multi- product offering. Traded on the NASDAQ from 1997 to 2002, Aramex today is a publicly traded company on the Dubai Financial Market, employing more than 13,800 people in over 350 locations across 60 countries.

And leads a strong alliance network providing global presence and bringing together 40 independent express companies from around the world.

The range of services offered by Aramex includes integrated logistics solutions, international and domestic express delivery, freight forwarding, secure records and information management solutions, and e-services, including e- business solutions and Shop and Ship.