Aramex 2009Q1 profit AED43m +19%

[sharewadi]

Press Release 03 May 2009:

Aramex first quarter net profit rises 19% Resilient, asset-light logistics provider adapts to economic challenges Dubai: Aramex (ARMX), the global logistics solutions provider, today announced net profits of AED 43.1 million for the three-month period ending March 31, 2009, compared to AED 36.2 million for the corresponding period in 2008, representing an increase of 19%. The company’s strong financial performance, despite extremely challenging market conditions, reflects the adaptability of Aramex’s asset-light business model, and its ability to quickly adopt cost-efficient programs during prolonged economic downturns. Revenues for the first quarter of 2009 reached AED 463.4 million, a 6% drop from the AED 494.5 million achieved during the same period in 2008. However, although this decrease was driven by a significant global slowdown in trading activity and a fall in worldwide industrial output, the depressed climate did help Aramex in reducing costs by negotiating better rates with its major suppliers. It is also important to note that Aramex’s revenues in the GCC stayed strong and showed an increase of 5% over the same period last year, fueled by growth in domestic and international express services, and despite a double-digit drop in freight forwarding revenues. The strong financial position of the company is backed by AED 342.8 million in cash and a very low debt position. “The past two quarters, which have witnessed a global financial meltdown, a very serious slump in worldwide trade, and very low levels of consumer confidence, have tested our ability to deliver the results expected of us by our stakeholders,” said Fadi Ghandour, founder and CEO of Aramex. “During this period, we needed to stabilize the business while continuing to deliver the same high-standard services to our clients. At the same time, we needed to reassure our own employees, and to let the market know that our asset-light business model is at its best when it is tested – as in these turbulent times. “I am happy to say that Aramex’s results for this quarter are a testament to the resilient, entrepreneurial spirit of our people. Working as a team, we controlled costs at all levels, pursued market share aggressively, negotiated with suppliers, and protected our existing clients,” Ghandour said. “As a result of these actions, our margins have improved.” Ghandour continued: “It is important to note that an accelerated trend in outsourcing logistics services across the Gulf is now clearly apparent, prompted by clients revisiting their cost structures and needing to streamline their supply chain. Aramex continues to benefit substantially from this new trend and, more generally, remains focused on meeting the evolving needs of our clients by developing and customizing our service offerings, and empowering our employees across the network.” Freight The slowdown in global trade had an especially significant impact on freight activities, particularly Aramex’s European and North American operations. Freight revenues declined by 20% AED 174.5 million in the first quarter of 2009, compared to AED 218.8 million during the same period last year. International Express International express revenues grew by 4% in the first quarter of 2009 compared to the same quarter last year, despite the general decline in business. Revenue growth was driven by the company’s strong performance in e-commerce and relatively stable prices in its core markets, which include the Gulf and Near East. Domestic Express The company’s domestic express segment continued to witness sound growth in its core markets – GCC and Near East – while revenues across the network grew by 10% in the first quarter of 2009. Document Management InfoFort, the company’s document management services division, continued to perform above expectations in the first quarter of this year. That performance was further supported by the acquisition of Metrofile Middle East, a UAE-based document and records management company, which contributed to the considerable growth in InfoFort’s organic operations.

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