Dubai's Aramex expects double-digit profit growth, eyes Africa buys

January, 13th 2014

Reuters - Dubai-listed logistics group Aramex expects double-digit net profit and revenue growth for 2013 and is eyeing acquisitions in South Africa and east Africa in the second half of this year, its vice-chairman said on Wednesday.

Nine-month net profit at the firm rose 13% year-on-year and full-year results should be in line with this, Fadi Ghandour, founder and vice-chairman, told Reuters on the sidelines of a youth unemployment event.

Ghandour said he was “relatively optimistic” about the company’s performance in 2014, with African expansion, the growth of internet shopping in the Middle East and its oil and gas business all expected to be key earnings drivers this year.

Africa would be Aramex’s main focus for growth, Ghandour said, with expansion through a mixture of new operations, setting up licence agreements in some countries – which would be fully-fledged Aramex businesses but owned by local partners – and acquisitions.

“Most interesting is going to be east Africa and South Africa. We’ve done one a couple of years ago in South Africa and we’d like to do one more,” he said, referring to the purchase of logistics firm Berco Group in December 2011.

Nigeria and Turkey were also attractive locations, although the former had great potential but was a challenging market.

Ghandour did not expect to make any acquisitions before the third quarter of this year and anything costing below $100m, Aramex could finance itself, he said.

The company’s unleveraged balance sheet meant it would have no difficulty borrowing from banks if it needed funding for any purchases, he said.

“We know, from our talking to [banks] informally over the past two to three months, that there is plenty of debt available to tap into,” Ghandour said, adding the firm had no plans to make a debut bond offering.

Aramex shares closed 0.3% higher on Wednesday at AED 2.99, just short of a seven-and-a-half-year closing peak of AED 3.04 set on 31 December.

Source: Dailynewsegypt.com