Aramex posts weaker-than-expected third quarter profit

But revenues in line with forecast in spite of currency fluctuations

Aramex profits rose 13 per cent in the third quarter but came in below analysts' expectations. Silvia Razgova / The National

Aramex, the Middle East's largest courier company, posted weaker-than-expected growth in third-quarter profit on Sunday, despite registering growth in its e-commerce and freight business lines. 

The company's net income rose 13 per cent year-on-year to Dh81.6 million for the three-month period  ended September 30, according to a statement posted on the Dubai Financial Market, where its shares are traded.

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However, the profit increase came in below the  forecast of Dh87.8m from the EFG-Hermes analyst Wafaa Baddour.

The company’s revenues rose 9 per cent to Dh1.14 billion, in line with EFG’s forecast, in spite of a hit from global currency fluctuations, especially with the Egyptian pound, which was devalued in November last year. 

“All our geographies and business segments performed very well in the last three months,” said the Aramex chief executive Hussein Hachem.  “We also continued to witness strong cross-border e-commerce growth across key markets, especially in Asia and Asia-Pacific.”

Aramex shares dropped 2.8 per cent in early trading before recovering at the close to end up 1 per cent at Dh5.11. “Ongoing economic uncertainty in the GCC [led by volatility in oil prices and production cuts] continues to be affecting [Aramex’s] sequential growth in the region,” said Naeem Research of Egypt in a note published on Sunday. 

“On the other hand, North America and Asia showed very strong performances; year-on-year growth rates amounted to 17.9 per cent and 22 per cent, respectively, in line with the company’s plan to diversify its revenue mix [by geographical expansion, including acquisitions] and product mix [by increased emphasis on the high-growth ecommerce space].”

Aramex reiterated its stra­tegy of pursuing strategic partnerships and implementing new technologies into 2018. The company last month announced the trial of 10 electric vehicles in Jordan, which it will widen to the UAE, Egypt and Lebanon over the coming year.