Aramex, a leading provider of logistics and transportation solutions, has registered a 4 per cent growth in its revenues for the second quarter which surged to hit AED1.32 billion ($359 million), compared to AED1.28 billion ($348 million) last year, driven mainly by a surge in e-commerce activities resulting from increased online shopping during Covid-19 related lockdowns.
Announcing both the Q2 and first half results ended June 30, 2020, Aramex said revenues in the H1 2020 increased by 1% to AED 2,528 million, compared to AED 2,512 million in the corresponding period of 2019.
However, the group's net profit in Q2 plunged 23% to AED 94.4 million, compared to AED 123 million last year mainly because of a rise in unforeseen costs prompted by the global onslaught of Covid-19 such as the exceptional challenges in cross-border operations due to border closures, the increase in line haul costs which in turn impacted profit margins in both International Express and Freight.
For Domestic Express, higher costs were incurred related to scaling operations in core markets in response to the surge in shipment volumes, said the top logistics group in its statement.
Additionally, in line with Aramex’s commitment to providing safe and essential services to its customers, there were increased costs related to personal protective equipment for company employees and other health and safety measures such as sanitization of warehouses, sorting facilities and fleets.
Over the period, the company introduced cost containment measures and expects most measures to remain in place for the second half of the year in light of the uncertain market outlook nd lack of visibility of second and consequent Covid-19 waves.
Aramex’s net profit in the first half too fell by 30% to AED 162 million, compared to AED 231 million last year.
On the results, CEO Bashar Obeid said: "Given a very challenging period, I am pleased with Q2 results, the heroic performance of our employees and the strong growth in overall express shipment volumes."
“Within our business lines, Domestic Express was the standout performer driven by exceptional growth from e-commerce related deliveries as government mandated stay at home measures and lockdowns forced people to turn to online channels to shop for necessities and other goods," remarked Obeid.
"We also benefitted from a surge in demand for healthcare related shipments which is positively reflected in our Freight and Domestic Express service lines. However, some industries which we service are still witnessing a slow recovery; the oil and gas sector which has been impacted by low oil prices and the economic slowdown has negatively impacted the performance of Freight, as has the sluggish demand for traditional retail. While we are starting to see a modest recovery in some of our verticals, it is too soon to say with certainty that we have returned to pre-Covid-19 levels," he added.-TradeArabia News Service