Aramex Q3 profit plunges on losses to property in Lebanon and Morocco

The company expects healthy demand for its express business during the holiday period

Aramex's third quarter revenue rose 19 per cent year-on-year to Dh1.5 billion. Silvia Razgova / The National

Aramex, the Middle East’s biggest courier company, reported a 59 per cent drop in third-quarter net profit due to losses incurred on its property in Lebanon and Morocco.

Net profit attributable to equity holders of the parent company for the three months to the end of September declined to Dh46.2 million ($12.5m), the company said in a statement on Thursday to the Dubai Financial Market, where its shares trade.

Losses on property damages and customer goods, due to the August Beirut Port blast in Lebanon and a warehouse fire in Morocco during the period, reached Dh53m, Aramex said. Without these losses, the company's net profit would have only been down by an annual 13 per cent.

Revenue rose 19 per cent year-on-year to reach Dh1.5 billion.

“We witnessed a very strong set of results over the three-month period, achieving the highest third-quarter revenue on record supported by growth across most of our business lines,” Bashar Obeid, chief executive of Aramex, said. “Covid-19 has accelerated growth in the e-commerce industry, which remains the dominant driver of our top-line growth.”

Aramex also managed to "capture new opportunities" from other industries, namely healthcare and pharmaceutical as well as retail and food and beverage during the period.

“This has enabled us to further diversify our revenue mix, which is a core part of our commercial strategy to ensure we continue to grow sustainably through various market cycles,” Mr Obeid said.

ADQ, one of the region’s largest holding companies, acquired 22.25 per cent of Aramex in September through a series of on-market transactions and through an off-market special deal.

The company's international express business increased 29 per cent to Dh715m, as shipment volumes rose 12 per cent during the period, it said on Thursday.

Aramex's domestic express business revenue also grew 29 per cent to Dh350m, driven by strong demand from e-commerce activities especially in Saudi Arabia and the UAE.

However, its freight-forwarding business revenue dropped 2 per cent to Dh275m, mainly because of the decline in demand from the oil and gas industry.

The logistics and supply chain business, on the other hand, rose 6 per cent to Dh94m as regional retailers witnessed a recovery in their sales activities due to the easing of Covid-19-related restrictions, the company said.

“For the upcoming holiday period, we anticipate new and veteran online shoppers to turn to online channels to buy goods and send gifts to family and friends all over the world. As such, we expect healthy demand for our express business,” Mr Obeid said.