Higher costs eat into Aramex's second quarter 2020 net profit

But it was on profitability that the logistics company took a hit – second quarter net was down 23 per cent to Dh94.4 million. This was brought about by “unforeseen costs” stemming from the COVID-19 outbreak.

This in turn led to “exceptional challenges in cross-border operations due to border closures, [and]increase in line-haul costs, which in turn impacted profit margins in both international express and freight,” the company said in a statement.

Net profit for the first six months is down 30 per cent to Dh162 million from the Dh231 million a year ago.

What of rest of the year?

According to Bashar Obeid, CEO, “We are not out of the woods yet - the shape of the global economic recovery is still uncertain. And it is too early to determine a clear trend or change in consumer behavior.

"However, we are optimistic that growth in e-commerce will continue to drive healthy shipment volumes and expect to continue to see solid growth in the healthcare vertical, albeit at a likely slower pace of growth. As such we will continue to allocate resources to expand last-mile operations and upgrade our infrastructure, including warehouses and fleets."

None too surprisingly, domestic shipments was the solid performer through the first-half, driven by online sales deliveries. Another contributor was helping meet the urgent need for healthcare-related equipment.

“Some industries which we service are still witnessing a slow recovery,” said Obeid. “The oil and gas sector has negatively impacted the performance of freight, as has the sluggish demand for traditional retail.

“While we are starting to see a modest recovery in some of our verticals, it is too soon to say with certainty that we have returned to pre-COVID-19 levels.”