Dubai's Aramex sees profits impacted by e-commerce pricing pressure
Dubai-based logistics major Aramex on Thursday announced a small increase in third quarter net profit to AED113.8 million due to tighter yields and pricing pressure from the cross-border e-commerce business.
The company also posted a 2 percent rise in Q3 revenues to AED1.270 billion, which were impacted by the company’s strategic restructuring of its operations in India and currency fluctuations.
Despite the 13 percent growth of international express volumes over the quarter, revenue growth was lower than expected due to tighter yields on e-commerce business as a result of pricing pressure.
Net profit for the nine-month period ending September 30 increased by 2 percent to AED344.9 million. the company added.
Bashar Obeid, CEO of Aramex, said: “We are pleased to see strong growth in Aramex’s e-commerce volumes despite pricing pressure witnessed across the e-commerce industry. As we expect the low-margin environment to continue over the next quarter, we will remain focused on improving service levels on the ground to prioritise quality across the delivery journey; and optimizing costs throughout the business to build further resilience.
“We remain confident in the strategic direction we have taken to maintain and support the growth of our e-commerce business across the region."
Commenting on Aramex’s outlook for the remainder of 2019, Obeid added: “As we enter our busiest quarter of the year, we are well prepared to adapt to an expected surge in demand. We expect continued growth in international and domestic e-commerce volumes to support our topline growth over the period. At the same time, pressure on pricing will likely continue to impact revenue growth and profitability for the remainder of the year."