Dubai: Dubai’s logistics major Aramex was hit by a 32 per cent drop in net profits for the first quarter of 2021, with Dh46.01 million compared to Dh67.41 million a year ago,
This was despite international and domestic express volumes totaling 31.59 million, which is a 26 per cent increase over last year. “The decline in operating profit and EBITDA was impacted by an increase in line haul costs on the back of global capacity constraints caused by supply chain disruptions due to the pandemic,” said Bashar Obeid, CEO. “The capacity shortage during the quarter was further exacerbated as the global COVID-19 vaccines transportation and distribution gathered pace.
"The downward pressure on margins will likely continue for the remainder of the year. However, [this] will slowly start to abate as we continue to explore ways and redesigning our line haul network. Also, our strategic focus of investing in our digital transformation will continue to drive down costs and enhance profitability over the long run.”
Aljeda has been with the company since 1994 and set up Aramex’s first regional office in Asia and spearheaded its expansion plans in the region, establishing hubs in Hong Kong and Singapore. In 2015, he led its “first successful acquisition”, of Mail Call in Australia. In 2016, Othman was also involved with the acquisition of Fastway Couriers in Australia and New Zealand.
But on the revenue front, Aramex has done well, with Dh1.42 billion from a 24 per cent increase. It has also been keeping a lid on costs and debt, reporting a negative net debt position of Dh353 million.
This indicates a “strong cash balance as at 31 March. This solid financial position enables the company to continue investing in scaling operations, rolling out digital solutions and swiftly executing on future opportunities, including value-enhancing acquisitions,” the company said in a statement.
According to Obeid, "In Q1-2021 we witnessed revenue growth across all our business lines, an indication that the global economy is staging a gradual recovery and that business and consumer confidence is improving. We are very encouraged by the double-digit growth in our revenues, which was predominantly driven by healthy increase in demand from cross border e-commerce and last-mile services.
"The top line growth was also driven by strong recovery in our B2B services lines, particularly from the healthcare and FMCG sectors."
