Its bigger push into Saudi Arabia will add more fuel to Aramex’s growth chances.
Image credit: Antonin Kélian Kallouche / Gulf News

The pandemic has had a significant impact on supply chain operations, with road and air freight the most affected by flight cancellations. As foreign economies begin to ease restrictions, the sector is recovering.

Pharmaceutical logistics have played an increasingly essential role in the distribution of COVID-19 vaccines, which will contribute to the vertical expansion of the market. Dubai’s strategic location between Asia and Europe serves both East and West, providing optimal trading conditions for the Emirate. The best way to take advantage of this advantage is to invest in Aramex.

Aramex, a Dubai-based global logistics, courier and parcel services company with a market valuation of Dh6 billion, made a net profit of Dh67.81million in September, up from Dh46.2million a year ago. year, or a 47 percent gain. However, normalized net profit for the three months fell 70 percent to Dh29.6million from Dh99million last year, eliminating one-off events.

Cut your growth

Aramex reported a marginal 14% increase in nine-month revenue to Dh 4.46 billion from Dh 3.91 billion as the company benefited from shifting consumer preferences towards online shopping and the resumption of global commercial activity after Covid.

Last month, GeoPost, a parcel services company based in France, bought 20.15% of Aramex, with an estimated value of 1.4 billion Dh. The acquisition aims to open opportunities to strengthen the networks of both parties and create a more seamless global network for transport and logistics services.

The Expo will require additional resources to stimulate trade and the flow of goods through logistics networks. International suppliers and ports will benefit axiomatically. Aramex appears to be in a good position to take advantage of this opportunity.

The Saudi movement will deliver

Aramex highlighted its accelerated expansion in the Saudi market, aided by the kingdom’s ambition to diversify its investment portfolio and to be a regional logistics center. Growing prospects in Saudi Arabia allow Aramex to expand business to gain greater market share.

The pandemic has caused supply chain disruptions, which have wreaked havoc in the shipping and logistics sectors. Nevertheless, these bottlenecks seem to be gradually dissipating. Aramex appears to be benefiting from this environment, as inline transport costs have declined from their 2020 peak and capacity issues ease, resulting in a slight increase in operating margins and reduced delays in the business. cross-border.

Even though Aramex encountered significant challenges during the pandemic, which limited its growth prospects, the company has experienced an almost complete return to its pre-Covid operating environment and has seen a few trends that could shape its growth strategy. . Domestic express volumes started to increase, driven by strong growth in the number of companies using online sales platforms.

Rising oil prices and increased activity in the oil and gas industry have prompted GCC governments to increase investment and spending in shipping and logistics development to further reduce bottlenecks supply chain bottleneck.