Categories: Business

Aramex gets heavy institutional support with ADQ entity buying 22.25%

Aramex confirmed to DFM that Alpha Oryx Ltd., a company affiliated with Abu Dhabi’s ADQ, had acquired 22.25 percent of the issued share capital of Aramex. Aramex shares were purchased through a combination of market transactions and off-market transactions.

This confirms Aramex’s status as a premium logistics company of the UAE. In addition, an acquisition by ADQ indicates that the business is of strategic importance and that it is good for its future. Abu Dhabi is likely to consider Aramex as a key partner in resolving its logistical issues.

COVID-19 showed us how important the last mile of connection is and the important role that Aramex plays in it. While the entire hospitality as well as the retail sector suffered, e-commerce was one. In fact, online sales have improved the pain in the retail sector.

Revenue drives e-commerce wave

Aramex with a market capitalization of nearly Dh6 billion supported e-commerce and acted as a key cog in the UAE’s supply chain. As a result of the trend, Aramex’s revenue grew by 4.2 percent to Dh1.33bn in the second quarter.

It is a very diversified enterprise with the MENA region making up 56.90 of the revenue, the rest of Asia 27 percent, Europe 13 percent plus, and North America is 2.50 percent.

Aramex also steadily increased its revenue. From Dh3 billion in 2012, it has grown to Dh5,2 billion in the past year. For the most recent quarter, international speed services contributed 43.70 percent of revenue and local expression 25.2 percent. The company with a dividend yield of 4.13 percent is definitely a good bet for long-term investors looking to boost the UAE e-commerce trends.

DFM reflects weak global sentiments and declined 2.16 percent on Monday (September 21), while ADX ended the day in the red with 1.19 percent. US President Trump, who is considered market-friendly, lags behind former Vice President Joe Biden, while Europe sees a surge in coronavirus cases. All of this is hampering risk sentiment … and the UAE markets are likely to have a tough week.

Vijay Valecha is chief investment officer at Century Financial.

Source: Gulf News

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