Aramex, the Middle East’s biggest courier company, reported a 23 per cent drop in the second quarter net profit due to a rise in "unforeseen" costs related to the Covid-19 pandemic.
Net income for the three months to June 30 fell to Dh94.4 million, Aramex said in a regulatory filing to the Dubai Financial Market on Wednesday. Second quarter revenue, however, grew 4 per cent year-on-year to Dh1.33 billion.
"As a business, we are now operating in a higher cost environment which is adding pressure to our profitability margins, Bashar Obeid, chief executive of Aramex, said. "Having said that, we have a robust balance sheet and comfortable free cash flow position, enabling us to manage higher costs while continuing to protect shareholder value."
Global trade has been hit hard by the restrictions put in place to stop the spread of Covid-19. In May, the World Trade Organisation said global trade would fall between 13 and 32 per cent in 2020, with all regions facing double-digit declines.
Aramex said coronavirus-related costs such as challenges in cross-border operations due to global shutdowns and an increase in line-haul charges, affected profitability of its international express and freight units.
The company said its international express business decreased 1 per cent to Dh582m, as shipment volumes dropped 4 per cent in the second quarter.
Its freight-forwarding division saw business decrease 3 per cent to Dh268m, mainly because of declining demand from the oil and gas sector and traditional retailers. However, a surge in demand for healthcare-related shipments offset some of that pressure, it said.
Its logistics and supply chain business remained flat year-on-year.
However, the company's domestic business grew 31 per cent as customers, confined to homes, increased the use of e-commerce sites to buy goods, particularly those in Saudi Arabia, UAE, and Kuwait. Online shopping also increased ahead of the rise in VAT and custom duties in Saudi Arabia, it added.
"While we are starting to see a modest recovery in some of our [business] verticals, it is too soon to say with certainty that we have returned to pre-Covid-19 levels," Mr Obeid said.
Aramex said it will continue to invest in expanding last-mile operations and upgrading its infrastructure, including warehouses and transportation fleet.
“We are not out of the woods yet; the shape of the global economic recovery is still uncertain, and it is too early to determine a clear trend or change in consumer behaviour," Mr Obeid said.
"However, we are optimistic that growth in e-commerce will continue to drive healthy shipment volumes and expect to continue to see solid growth in the healthcare vertical, albeit at a likely slower pace of growth," he said.
UAE currency: the story behind the money in your pockets
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Brief scores:
Pakistan (1st innings) 181: Babar 71; Olivier 6-37
South Africa (1st innings) 223: Bavuma 53; Amir 4-62
Pakistan (2nd innings) 190: Masood 65, Imam 57; Olivier 5-59
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Company Profile
Company name: Big Farm Brothers
Started: September 2020
Founders: Vishal Mahajan and Navneet Kaur
Based: Dubai Investment Park 1
Industry: food and agriculture
Initial investment: $205,000
Current staff: eight to 10
Future plan: to expand to other GCC markets
Company%20Profile
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The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
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UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
UAE%20ILT20
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