The Dubai-quoted logistics firm Aramex reported a 14 per cent rise in net profit in the first three months of the year, driven by an increase in online shopping.
First quarter net income surged to Dh78.8 million, up from Dh69.3m during the first three months of 2013, Aramex said yesterday.
Revenues rose 6 per cent compared with a year earlier, rising to Dh852m between January and March 2014 from Dh803m in the first quarter of 2013.
Aramex said that the growth was driven by an increase in its international express delivery parcel service as consumers across key markets in the Middle East and Africa buy more goods over the internet and pay the company to ship them.
“We have started the year strongly,” said the Aramex chief executive Hussein Hachem. “International express in particular achieved excellent growth, driven by increasing demand and revenues from regional and global e-commerce.”
Online retailing has been slower to take off in the Middle East than in western countries where consumers find it easier to have purchases delivered to postal addresses and where stores more readily accept credit cards.
However, that is changing quickly with the Middle East online commerce market predicted to grow from US$9 billion in 2012 to $15bn by 2015, according to PayPal Mena.
And it’s not just that people in the region are changing their shopping habits from visiting malls to ordering through the internet. Aramex also said that the results reflected wider economic growth in the region, prompting people to buy more goods overall.
The IMF predicts GDP in the UAE to grow by 4.4 per cent this year, while in Qatar growth is expected to reach 5.9 per cent.
“The performance was driven by substantial growth in Aramex’s key geographies in the Middle East, sub- Saharan Africa and Asia and across its core businesses in express, logistics and freight,” Mr Hachem said. “Despite recent concerns over growth prospects in emerging markets, our continued focus on delivering against strategy has enabled us to achieve record profits once again.”
Aramex said that it would continue to expand its e-commerce proposition in 2014 and would also “actively pursue” acquisitions in sub-Saharan Africa and Asia as well as expanding oil and gas services in North and East Africa.
lbarnard@thenational.ae
Follow us on Twitter @Ind_Insights