Dubai: Aramex, the Dubai-listed courier company, on Thursday reported a 1 per cent increase in profits attributable to shareholders in the third quarter of 2019 as revenues inched up.
The company recorded Dh113.7 million in profits in the quarter, bringing profits in the first nine months of this year to Dh344.9 million, up 3 per cent year-on-year. Aramex said the slow increase was due to tighter yields, pressure from the e-commerce business, as well as the implementation of a new accounting standard, the IFRS16.
The earnings came as revenues in the third quarter rose by nearly 2 per cent to Dh1.27 billion from Dh1.24 billion in the same period in 2018. Revenues for the first nine months of the year reached Dh3.78 billion, up 3 per cent.
In a statement, Aramex said that revenue growth was “lower than expected” due to pricing pressure in e-commerce, resulting in tighter yields. The company said it expected the tighter margins to continue over the next quarter of the year.
“As we enter our busiest quarter of the year, we are well-prepared to adapt to an expected surge in demand. We expect continued growth in international and domestic e-commerce volumes to support our top-line growth over the period,” said Bashar Obeid, chief executive officer of Aramex. “At the same time, pressure on pricing will likely continue to impact revenue growth and profitability for the remainder of the year.”
In the third quarter, Aramex’s International Express grew by 3 per cent to Dh556 million, even as volumes rose by 13 per cent on the back of strong demand from the US, China, and other Asian markets.
The Domestic Express business, meanwhile, grew by 6 per cent to Dh271 million, as volumes jumped by 29 per cent due to strong demand in GCC markets, including Saudi Arabia and the UAE.