Dubai-based logistics company, Aramex, has released its financial results for the first quarter ended 31 March 2020 and an update on Covid-19 measures.
Aramex’s Q1 2020 Revenues fell 3.0 per cent to AED 1.196 million (approx. €301.4 million), compared to AED 1,234 million (€310.9 million in Q1 2019). Net Profit for the period decreased 38 per cent to AED 67.4 million (approx. €16.9 million) compared to AED 108 million (approx. €27.2 million) in Q1 2019.
Aramex has taken several health and safety measures since the start of the Covid-19 outbreak in China in January to protect the health and safety of its people, customers, operations, and other stakeholder groups.
“Just like all businesses around the world, the onslaught of the Covid-19 pandemic is challenging our operations, business model and financial standing,” said Aramex CEO, Bashar Obeid.
“But as an essential industry operating under such difficult and stressful circumstances it has also revealed the truly heroic efforts of Aramex employees and has demonstrated the resilience of our business as evidenced by the limited impact on total revenue.
“Our number one priority is the health and safety of our employees, customers and communities. As the pandemic spread across the world, we intensified our efforts to protect the health and safety of Aramex employees and other stakeholders.
“From a business perspective, it is too soon to say with certainty how severe and lasting the impact of the pandemic will be on our business. However, in Q1 our revenue mix has shifted on the back of considerable changes in consumer shopping behaviour and e-commerce trends, and we saw an increase in the cost of doing business.
“Over the period, International Express and Freight Forwarding were negatively impacted. The general softening in demand for goods, and more complicated and costly shipment routes have impacted our volumes and profit margins in those service lines. In stark comparison, Domestic Express and Logistics and Supply Chain Management have witnessed significant increases in activity levels. This is mainly because almost entire populations in countries where we have significant on the ground operations were encouraged to turn to online channels to purchase and deliver necessities, such as food and other household goods. This has prompted major traditional retailers in our core countries to turn to Aramex to partly handle the influx of orders and deliveries and relieve pressure on their limited last mile capacities. At the same time, major e-commerce players have also increased their demand on our services to support their last mile delivery requirements.
“Over the period we have also intensified our commercial aspirations by targeting companies in the pharmaceutical, life sciences and healthcare sector. We are confidently servicing new clients and we expect to continue to see an increase in activity from those critical industries and sectors over the coming periods,” he said.
Iyad Kamal, Chief Operating Officer at Aramex, said that since the start of the Covid-19 outbreak, Aramex had to rapidly adapt and address several operational hurdles and challenges which affected all business lines.
“International Express and Freight Forwarding witnessed significant changes in line haul operations as a result of the interruptions in air travel and the changes in land border regulatory requirements, yet we managed to stay operationally nimble, swiftly adapting to those changes,” said Kamal.
“Domestic Express saw a spike in volumes which strained our last mile capacity in some key markets, however we were able, to a good extent and in a short period of time, to scale our last mile operations to cater to the increased demand in those markets. Logistics and Supply Chain Management continued to perform exceptionally despite the challenges to staff scheduling and restrictive mobility.
“Our ability to operate under stressful and challenging conditions is a reflection of our flexibility and the hard work of our exceptional operations teams across the world. This was a display of resilience and creativity under difficult circumstances through finding swift alternatives to minimise the continuous disruptions, despite the risks. The digital transformation efforts that we carried out over the last two years have had a positive impact on our operations throughout the first quarter. Those efforts include strategic upgrades to our technology across all touch points, significant improvements in our tech-powered last mile operations, and investments in ramping up our warehousing and logistics capabilities.
“We will continue to work very hard to optimise our operations and increase operational efficiencies despite the current challenges,” he said.