Today's Edition
A.SREENIVASA REDDY (ALETIHAD)
Global logistics giant Aramex announced robust financial results for the fourth quarter and full year 2024 amid a takeover bid by Q Logistics Holding, a subsidiary of Abu Dhabi Developmental Company (ADQ).
The logistics firm recorded an 11% year-on-year (YoY) increase in revenue both in the last quarter and the entire year.
Q Logistics has offered to buy up all company shares not owned by the AD Ports Group, another subsidiary of ADQ. Abu Dhabi Ports currently holds 22.69% of Aramex shares, according to data available with the DFM. Geopost SA, a French state-owned postal service subsidiary, is another major shareholder with a 28% ownership stake.
Q Logistics has offered Dh3 per share, valuing Aramex at Dh4.39 billion. Shareholders have until March 10 to accept the bid. Market analysts believe the offer is likely to be accepted by Aramex shareholders, though the company’s strong financial performance could influence the outcome of the takeover.
Commenting on the offer, Samer Mardini, Chief Investment Officer at Yorklyn Asset Management, said: “Aramex’s strong financial results highlight its resilience and growth potential, making ADQ’s Dh3 per share offer appear somewhat conservative. Given the company’s solid trajectory, some shareholders may push for a higher valuation.”
However, he noted that the takeover is still highly likely to proceed with AD Ports and Geopost holding a combined majority stake.
The company’s performance was fuelled by strong growth across its product lines, including International and Domestic Express, Freight Forwarding, and Contract Logistics.
Aramex’s total revenue for 2024 reached Dh6.3 billion, up from Dh5.7 billion in 2023. Q4 revenue also rose 11% YoY to Dh1.7 billion. The company reported a 6% YoY increase in gross profit, reaching Dh1.5 billion, maintaining a 24% margin.
Net profit for the year stood at Dh142 million, reflecting a 10% YoY increase, despite challenges from currency fluctuations. Excluding the impact of the Egyptian pound’s devaluation, net income would have been Dh 144 million for the year.
Aramex saw double-digit revenue and profitability growth in the GCC and MENA regions, reinforcing its dominance in its core markets. The Oceania division demonstrated an impressive turnaround, reporting nearly 50% YoY growth in revenue and gross profitability.
The company attributes its success to the rising nearshoring trend, where businesses are shifting inventory closer to key markets to enhance supply chain efficiency. This has significantly boosted demand for Domestic Express, intra-regional International Express, and warehousing solutions.
The International Express division's full-year revenue increased 5% YoY to Dh2.4 billion, with shipment volumes up 20%. However, Q4 revenue declined 6.2%, reflecting shifting trade patterns favouring domestic logistics.
In the Domestic Express segment, revenues surged 18% YoY to Dh1.7 billion, with 11% growth in shipment volumes.
In Freight Forwarding, revenue rose 15% YoY to Dh1.7 billion, though gross profit margins declined due to industry-wide pricing pressures.
In Contract Logistics, full-year revenue increased 6% YoY to Dh455 million, benefiting from expanded warehousing capabilities.
Aramex plans to invest further in technology and automation to enhance operational efficiency. CEO Othman Aljeda highlighted the company’s strategy to capitalise on nearshoring trends and drive sustainable growth. “2025 will be about smart, efficient scaling while maintaining operational discipline and innovation across our network,” he said.
