Aramex delivers profit but misses its target

Dubai logistics company Aramex said third quarter profit rose 3 per cent as oil prices and regional unrest weighed on it growth.

Aramex, the region's largest courier company, has reported income advanced to Dh48 million in the third quarter. Pawan Singh / The National

Aramex, the largest courier company in the Middle East, said third-quarter profit rose 3 per cent, falling short of analysts' expectations, as oil prices and political unrest depressed earnings.

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Net income advanced to Dh48 million, from Dh46m in the same period last year, the company said in a statement to the Dubai Financial Market (DFM). Revenue rose 19 per cent to Dh651m.

A consensus of analysts surveyed by Bloomberg News forecasta net profit of Dh50m.

"A number of factors are behind the modest growth in net profits," said Fadi Ghandour, the Aramex chief executive and founder, in the statement.

"High fuel prices resulting in regional and global inflationary pressures in operating costs, increase in overheads, and the increasing cost of doing business in the Middle East in light of the wave of political uncertainties" affected earnings."

The company's operations in Saudi Arabia, the UAE, Europe and South East Asia were the most profitable, while operations in the Levant region and Egypt slowed because of the unrest there, he said.

"Performance for the remainder of the year is expected to continue on this course and fall in line with our estimates for the year," Mr Ghandour said.

Aramex is finalising a number of "strategic acquisitions and joint ventures" in key emerging markets in Central Asia and Africa, with the expected announcement of an acquisition by the first quarter of next year. The company acquired Aquaship Agencies, a liner agent and freight forwarder based in Ireland, to expand its freight capabilities in Europe.

"The numbers were very good, clean and operational, which makes me more positive about the company," said Kareem Murad, an analyst at Shuaa Capital. Aramex's shares rose 0.5 per cent to Dh1.81 yesterday on the DFM.

The stock has declined 12.9 per cent this year but is still outperforming the DFM General Index, which is down 15.5 per cent so far this year.