Aramex, the Middle East’s biggest courier company, said the global economic recovery and higher oil prices will boost the growth of logistics and freight-forwarding business in 2022, as it reported a 47 per cent jump in third-quarter net profit.
Net profit attributable to shareholders for the three-month period to the end of September increased to Dh67.8 million ($18.5m), compared with the same period last year, Aramex said in a statement on Sunday to the Dubai Financial Market, where its shares are traded.
Revenue was little changed at Dh1.46 billion, compared with Dh1.466bn in last year's third quarter, driven by double-digit growth in domestic express and a strong rebound in logistics and freight-forwarding business.
"Over the last few months, we have witnessed an almost complete return to [a] pre-Covid operating environment and are noticing a few trends that we believe will continue to shape the future of our business and drive our growth strategy," Aramex group chief executive Othman Aljeda said.
While global sea freight issues are disrupting supply chains, the impact on Aramex's business "has so far been manageable" and it expects these issues will be resolved in the coming few quarters, Mohammad Alkhas, chief operating officer of Aramex's logistics and freight-forwarding unit, said.
Land freight movement has improved considerably, and we are benefitting from increased capacity," Mr Alkhas said.
Aramex's new operational structure that was adopted in September is reflecting positively in its performance, Mr Aljeda said. The new structure split its core businesses into Aramex Express and Aramex Logistics to capture a greater market share of the global logistics industry.
“With a renewed emphasis on enhancing operating efficiencies, improving service levels to customers, building scale and [the] reorganisation of our team of professionals, we have been able to capture growth opportunities in both the courier business and [the] logistics and freight-forwarding business," he said.
The company's courier business, which includes international express and domestic express, posted a six per cent year-on-year decline in third quarter revenue to Dh997.4m. However it's up 13 per cent in the first nine months of the year.
Domestic express revenue grew 13 per cent, with shipping volumes driven by an increase in the number of retailers tapping into online sales. It's up 14 per cent over the nine-month period.
Operations in Saudi Arabia, the Arab world's largest economy, are posting "very strong growth" as Aramex presses on with its expansion in the kingdom, the company said.
"We are very encouraged by the recovery in economic activity in the GCC and around the world, and believe this growth will be sustained for the foreseeable future," Mr Alkhas said.
The improved oil prices and pick-up in activity within the oil and gas sector has encouraged GCC governments to increase investment and expenditure in key projects, he said.
"Collectively, these factors have supported the growth of the logistics and freight-forwarding business, and we expect this growth momentum to continue well into 2022."
Oil prices are at multi-year highs and have rallied more than 60 per cent since the start of the year.
Aramex is "very well prepared" to handle the expected surge in volumes as it approaches the busiest period for the courier business during the holidays, Mr Aljeda said.
"We believe we will continue to unlock opportunities and build scale while remaining agile, asset light and financially flexible," he said. "We will also further diversify and strengthen our global network to remain resilient to economic cycles and supply chain disruptions.”
Spain drain
CONVICTED
Lionel Messi Found guilty in 2016 of of using companies in Belize, Britain, Switzerland and Uruguay to avoid paying €4.1m in taxes on income earned from image rights. Sentenced to 21 months in jail and fined more than €2m. But prison sentence has since been replaced by another fine of €252,000.
Javier Mascherano Accepted one-year suspended sentence in January 2016 for tax fraud after found guilty of failing to pay €1.5m in taxes for 2011 and 2012. Unlike Messi he avoided trial by admitting to tax evasion.
Angel di Maria Argentina and Paris Saint-Germain star Angel di Maria was fined and given a 16-month prison sentence for tax fraud during his time at Real Madrid. But he is unlikely to go to prison as is normal in Spain for first offences for non-violent crimes carrying sentence of less than two years.
SUSPECTED
Cristiano Ronaldo Real Madrid's star striker, accused of evading €14.7m in taxes, appears in court on Monday. Portuguese star faces four charges of fraud through offshore companies.
Jose Mourinho Manchester United manager accused of evading €3.3m in tax in 2011 and 2012, during time in charge at Real Madrid. But Gestifute, which represents him, says he has already settled matter with Spanish tax authorities.
Samuel Eto'o In November 2016, Spanish prosecutors sought jail sentence of 10 years and fines totalling €18m for Cameroonian, accused of failing to pay €3.9m in taxes during time at Barcelona from 2004 to 2009.
Radamel Falcao Colombian striker Falcao suspected of failing to correctly declare €7.4m of income earned from image rights between 2012 and 2013 while at Atletico Madrid. He has since paid €8.2m to Spanish tax authorities, a sum that includes interest on the original amount.
Jorge Mendes Portuguese super-agent put under official investigation last month by Spanish court investigating alleged tax evasion by Falcao, a client of his. He defended himself, telling closed-door hearing he "never" advised players in tax matters.
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