Dubai: Aramex’s revenues rose by 5 per cent to Dh3.8b billion for 2015, while net profits declined 2 per cent to Dh311 million, the firm announced on Wednesday.
The Dubai-listed logistics firm said in a statement that currency variations, primarily in the euro, South African rand and the Australian dollar, caused a 4.4 per cent negative impact on revenues.
And it said a one-off employee incentive scheme intended to retain talent, which resulted in a $12.5 million (Dh45.9 million) one-off charge, had reduced its net income, which would otherwise have been Dh358 million, an increase of 12 per cent over 2014.
Chief executive Hussain Hachem said, “We had another strong year and we are very happy with our 2015 results. Despite global economic uncertainty, substantial drop in oil prices and currency fluctuations, our 2015 performance was very solid in revenue growth, primarily in international and domestic express, led by continued expansion of our e-commerce business across key growth markets.
“We are excited about the positive growth trajectory we are on and will carry this momentum into 2016.”
Revenues for small packages and property had increased, but revenues for freight haulage had declined even though volumes were higher, Hashem said,
Chief financial officer Bashar Obeid said the firm still had $75 million available for acquisitions from $150 million borrowed last year.
US opportunities
Hachem said the firm would consider expanding with two or three new acquisitions, and its focus was on Africa and Asia, though it continued to watch for US opportunities.
Its recent acquisitions — notably of small package specialist Fastway Couriers in Australia — and expansion into Asia and Africa had reduced its reliance on the Middle East market, which now contributed less than 50 per cent of revenues, Hashem said.
Mai Al Sayed, CFA, senior equity analyst at Mubasher Trade, in her note on the results, wrote: “Aramex’s broad strategy to diversify away from poor performing, low-margin segments (freight forwarding) and towards high-growth, high-margin business (e-commerce) started to bear fruit, confirming our positive view on the company’s business. We maintain our BUY/LOW RISK rating at PT of Dh4.16, implying a total return of 41 per cent.”
