Aramex improves profits but cautious on acquisitions
Aramex announced that it improved net profits by 21% in 2008 despite a slowdown in the fourth quarter.
Aramex announced that it improved net profits by 21% in 2008 despite a slowdown in the fourth quarter. The company will be cautious about any acquisitions this year, however.
For the year ending 31 December 2008, Aramex revenues grew by 17% to AED 2,080m ($567.28m). Net profits increased by 21% to AED 147.3m ($40.18m). In line with company policy, no forecasts for 2009 were issued.
In the fourth quarter of 2008, net profits went up by 21% to AED 38.8m ($10.58m), mainly driven by the significant improvement in margins of Aramex’s key products. Revenues for the period increased to AED 500.5m ($136.36m) compared to AED 495.0m ($134.86m) for the fourth quarter of 2007. Q4 revenue growth was impacted by the lower number of working days due to an increase in the number of holidays in the Middle East and flat to negative growth in revenues in European and North American markets.
On the topic of possible acquisitions, Fadi Ghandour, founder and CEO of Aramex commented: “We have a very healthy balance sheet with little debt, and we intend to keep it that way in 2009. Meaning: we will only embark upon new acquisitions if the value is very attractive in key strategic markets.”
Aramex last month clarified a January 6 article in the Emirates Business 24/7 publication about potential acquisitions despite the uncertain economic environment. Although company valuations in certain markets had declined, Aramex said it would take a cautious approach to any acquisition. The company could no longer confirm its ability to borrow up to $200m to fund potential acquisitions due to changed lending conditions.
