Aramex emerging markets strategy “paying off” after another record year

Aramex emerging markets strategy “paying off” after another record year

Express delivery and logistics firm Aramex has had another record year, with sales up 8% and net profits up 14% according to the latest company results. The achievement marks the ninth consecutive year in which Jordan-based, Dubai-listed Aramex has recorded record profits.

Growth has been particularly provided by the company’s international express services — driven by “robust” e-commerce demand.

The company has been benefiting from the move to online trading within the retail sector around the world, with its global e-commerce revenues growing by 23% in 2013.

Aramex has also been benefiting from its strategy of connecting high-growth emerging markets, such as those in Africa and Asia, to its global network.

Further acquisitions in these areas are now on the cards.

Hussein Hachem, the Aramex chief executive, said: “Our role in driving global connectivity by deepening trade links between high-growth markets is paying off. In 2014, we will be actively pursuing acquisitions across these trade routes.”

Growth

The last quarter of the year saw revenues up 5% year-on-year to AED 850m and net profit up 16% to AED 76.4m.

The full 2013 year saw revenues reach AED 3.325bn and net profits up to AED 278m.

Hachem said the “strong” results came despite a challenging global market.

“Our performance was driven by solid revenue growth primarily in international express and supply chain services across our key geographies and growth markets in the Middle East and sub-Saharan Africa. We will continue to aggressively deliver on our strategy to seize current and future opportunities across these emerging markets,” he said.

Arab states around the Persian Gulf remained the main market for Aramex in 2013, contributing the bulk of company revenues, but the company said new operations in sub-Saharan Africa was providing strong growth, thanks to its strategy to connect these emerging markets to its global operations and hubs.

After investment in Africa including a number of acquisitions, Aramex said the continent was also now a “key contributor”, with performance there gaining momentum. Africa remains a key market for Aramex in its expansion plans, the company said this week.

Hachem said: “We remain bullish in our outlook for Africa, Asia and the Middle East and will continue to drive our aggressive expansion plan, capitalising on our asset light operating model and global alliance network which remain our key competitive differentiators.”

International express

Global demand for online shopping helped Aramex international express services to thrive in 2013, with the division’s Q4 revenues up 11% year-on-year, to AED 285m and full-year revenues up 9% compared to 2012, to AED 1.057bn.

Aramex said e-commerce is developing at a rapid pace in emerging markets in the Middle East, Africa and Asia, and the delivery company can capitalize on this demand.

Hachem said along with the emerging markets strategy, his company would also look to continue to build on the growing business-to-consumer activity, “further developing and strengthening our e-commerce services to create more efficient platforms and systems for e-retailers across the globe”.

Elsewhere within the company, domestic express services saw revenues up 3% in Q4, to AED 162m, and up 9% on 2012 in the full year, to AED 645m. The company said slower growth within the domestic express division was the result of slow economic conditions in Europe and Asia.

Aramex achieved strong growth in its smaller logistics and supply chain division, with revenues up 11% in the last quarter of the year, to AED 45m, and up 23% in the full year to AED 170m. Freight services saw slower growth, up 1% year-on-year in the fourth quarter to AED 304m, and up 6% in the full year, to AED 1.235bn.

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