Aramex has reported revenues of AED4,721m for the year ended December 31, 2017, an increase of 9% year-on-year. Excluding adverse currency fluctuations, revenue growth would have been 11%.
Aramex’s International Express business grew by 19% to AED2,007m, due to the strong growth in cross-border e-commerce across all regions.
The strong performance of Africa and Asia Pacific was mirrored by 4% growth in the company’s Domestic Express operations, which registered revenues of AED1,022m.
Growth in the Oil and Gas business in the GCC, together with a strong performance in Africa and Asia saw Aramex’s Freight Forwarding revenue increase by 2%, to AED1,157m.
Logistics and Supply Chain Management operations were impacted by currency fluctuations, particularly in the Egyptian Pound, with revenues decreasing by 2%. On a constant currency basis, revenues would have grown by 6%.
While Aramex reported strong revenue growth in International Express e-commerce business, the company’s margins came under pressure due to applying volume-based incentive rates for certain key customers. In addition, Aramex adopted a “variable” last-mile business model in 2017, which put pressure on Domestic Express margins while capping the increase in operating expenses.
Aramex’s net profit in 2017 increased by 2% to AED435m. It was impacted by a one-time fair value adjustment related to Aramex’s investment in the AMC Logistics joint venture in Egypt in Q2 2016. Excluding this adjustment, net profit would have grown by 13%.
Commenting on the results, Bashar Obeid, Chief Executive Officer of Aramex, said: “We are pleased to report robust performance in 2017. Our strong results were mostly driven by the surge of cross-border e-commerce activities globally, which continue to fuel the growth of our International Express business. While being excited about the growth potential of global e-commerce business, we have witnessed an exceptional growth of Express volumes in Q4, which highlighted a need to boost investments in last-mile capacity solutions across all our key markets.”
Looking to the future, the CEO remarked: “We are very confident about the growth potential in 2018 amid the continuous boom in e-commerce activities globally, yet we have to remain cautious about the changing competitive environment that requires highest levels of efficiencies and operational effectiveness in meeting customers’ expectations.
“In addition to the solid growth in Express revenues, I am delighted that our Freight-Forwarding services, mostly driven by Oil and Gas activities, started to pick up in the fourth quarter, providing us with great business potential. We are extremely positive about the growth signs of these services and will be expanding our investments in technology and talent to accelerate the growth of Supply Chain and Freight-Forwarding services in various market segments and across all our markets.”
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