ARMX 2009Q3 profit AED42m +23%

[RaNdoMwalk]

ARMX press release on DFM website regarding 2009Q3 results shows a net profit (attributable to shareholders) of AED41.7m, which is 23% higher than 2008Q2 (AED34m) but 17% lower than 2009Q2 (AED50m).

On a nine-month basis, 2009 shows a net profit of AED134.8m, 23% higher than 2008 (AED108.5m).

Revenue in 2009Q3 (AED488m) has declined by about 11% from 2008Q3 (AED546m) but slightly increased from 2009Q2 (AED485m).

Press Release 25 October 2009:

Aramex third quarter net profit rises 23% to AED 41.7 million Third quarter revenues stand at AED 487.6 million Dubai, October 25, 2009: Aramex (ARMX), the global logistics solutions provider, announced today its financial results for the three months ending September 30, 2009. The company declared a net profit of AED 41.7 million for the period, an increase of 23% compared to AED 33.9 million in the corresponding period of 2008. Revenues for the third quarter of this year stood at AED 487.6 million, a decline of 11% compared to AED 545.7 million in the same period last year. Net profit for the first nine months of 2009 climbed 24% to AED 134.8 million, compared to AED 108.5 million for the same period in 2008. The decrease in the company’s revenues was primarily a result of a marked reduction in global freight forwarding activity, resulting in a decline of 20% in freight revenues across the network. Third quarter revenues were also negatively impacted by the extended number of public holidays and reduced business hours, including those on account of Ramadan and Eid holidays in the Middle East and North Africa region during the period. The financial results announced today by Aramex are in line with company expectations, and are reflective of similar trends in the first two quarters of this year. “In spite of the extremely challenging economic conditions that have prevailed during the first nine months of this year, impacting growth in our revenues, we have consistently announced double-digit increases in our net income quarter after quarter,” said Fadi Ghandour, Founder and CEO of Aramex. “This consistency is testament to the resilience and flexibility of our asset-light business model, and the entrepreneurial and innovative thinking of our people. “We continue to review expansion opportunities in underserved markets, especially in Africa and Central Asia,” Ghandour said. “As Aramex adjusts its long-term growth strategy in line with evolving market dynamics, we are also determined to upgrade and expand our existing logistics infrastructure in core markets.”

http://www.dfm.ae/documents/News%20Files/658fdfe2-486f-4927-aecd-b67c0ac8291a.doc

[sharewadi]

Thanks RW. I think you meant Q3 here ?

[RaNdoMwalk]

[RaNdoMwalk]

2009Q3 result shows an EPS of 0.031 AED/share, compared to 0.038 for 2009Q2 and 0.028 for 2008Q3. On a nine-month basis, 2009 shows an EPS of 0.10 compared to 0.09 for 2008.

2009Q3 result means an EPS of 0.124 AED/share on an annualised basis. Taking today's closing price of AED 1.77, this shows a P/E of around 14.

Any views on such a P/E for a company like ARMX.

I think it shows an attractive valuation for ARMX, when compared to other transport or similar stocks which show much higher P/E (over 20) on 2009 earnings.

[sam111sam]

[ixtira]

My view is that ARMX is a bit overpriced. Profits showed healthy growth but revenue was down by 11% which suggests that improvements are being made on the bottom line but not top line sales. Aramex has been sold to the share-buying public as a growth story … these results do not fit!

[dubaigreens]

Aramex is subject to several risks arising from regulatory pressures . Non document deliveries in Kuwait have suddenly come under scrutiny in Kuwait with absurd fees and duties and clearance delays being levied. These'ÿo-yo'risks particularly across the GCC states could impact certain lines of the their business adversely as volumes could get impacted.

[sharewadi]

Hello dubaigreen, welcome to the no-electrons-were-harmed-in-the-production-of-this-post Dubai stock forums and thanks for your contribution .
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[sharewadi]

DFM 02 November 2009 (pm):

(ARMX) Aramex: Discloses its reviewed interim condensed consolidated financial statements for the period ended 30/09/2009

I just had a brief look at the balance sheet and income statement. No massive changes that stand out. What did strike me as noteworthy was that despite falling revenues for 3Q and 9M 2009 (which seems understandable given the downturn in the economy) compared to the same periods last year, Aramex profits still increased - cost of revenues fell also, as did admin costs and general expenses.

2009 Q3 profit of AED 44.85m is about AED 0.034 EPS (1.331 bn shares outstanding).
Annualised is AED 0.135 earnings per share
Aramex share price today was 1.69, up 7.0% (DFMGI was up about 5.2%)
Aramex PE for Q3 = 1.69 / 0.135 = 12.5.

Perhaps a bit expensive compared to the rest of the market but maybe the premium is worth it if they can keep making steady profits, especially during volatile times as we've just seen.

On the Balance Sheet, Aramex have about AED 423m of cash and bank deposits, which seems to be enough to cover most liabilities. Total current and long-term liabilities is 434m. There's little debt but there is a figure of AED 235m for "Other Current Liabilities" whatever that is. Nothing obvious in the financial statements to explain it. That, and a large figure of AED 853m for Goodwill (which is generally intangible) are a bit off-putting.
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