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Dubai’s Aramex sees modest growth in 2011 amid unrest
Q1 net profit at 49.8 million dirhams; Libya ops suspended, no return to normality soon; Expects 10 to 12 pct revenue growth in 2011; Eyeing up to 3 acquisitions in 2011
April 27, 2011 2:58 by p.deleon
Logistics firm Aramex said revenue will grow at a modest 10 to 12 percent this year as unrest hits key markets and oil prices soar, after the company posted an increase in quarterly profit.
The Dubai-listed firm, which competes with Fedex and DHL, stopped its Libya operations and was hit by unrest in Egypt and Bahrain, it said in a statement on Tuesday.
“I expect very low double digit growth this year,” Fadi Ghandour, Aramex’s chief executive told Reuters after the results were announced.
“It will be similar to what we have seen. About 10 to 12 percent.”
He said the company is now concerned about its operations in Syria, where social unrest is growing.
“Operations are normal in most parts right now but we are concerned,” said Ghandour.
He said the courier firm’s operations in Libya are not expected to return to normal anytime soon.
Aramex posted a 5 percent rise in first-quarter profits to 49.8 million dirhams ($13.6 million), as revenues from Gulf operations grew. That was up from 47.5 million dirhams in the prior-year period.
Net revenue rose 12 percent to 595 million dirhams from 530 million dirhams.
“UAE and Saudi Arabia continue to be our strongest markets. Other Gulf markets also continue to grow despite the uncertainties. We have been gaining clients.” said Ghandour.
The company, which acquired two Kenyan delivery companies in February, will look at more acquisitions this year, the CEO said.
“We are looking at 2 to 3 acquisitions this year. We are aggressive about it….. we are looking at opportunities in Africa,” said Ghandour.
Shares of Aramex ended 2 percent lower on the Dubai bourse before the results were announced.
AlembicHC upgraded Aramex to “overweight” earlier this month stating that geographical diversification will help the firm grow earnings modestly in 2011 despite regional turmoil.
Aramex posted a 11 percent rise in its fourth-quarter net profit last year but warned that it faces rising operating costs in 2011.
By Praveen Menon
(Reporting by Praveen Menon; Editing by Amran Abocar and Louise Heavens)