Annual - Aramex

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Year 2007 Description International Express 29% Freight Forwarding 46% Domestic & Others 25% Annual Report 2008 VIII Total Company 100% Middle east 578.3 76.7% 537.4 56.3% 356.4 78.2% 1,472.2 68.1% Europe 65.1 9.4% 342.9 35.9% 72.6 14.0% 480.6 22.2% North America 36.7 3.1% 29.5 3.1% 2.4 3.4% 68.6 3.2% Asia & Indian Subcontinent 73.4 10.8% 45.1 4.7% 23.0 4.4% 141.6 6.5% Elimination (234.4) 0.0% (131.0) 0.0% (13.8) 0.0% (379.2) Total 519.1 100% 824.0 100% 440.7 100% 1,783.8 100% Seasonality The company’s business is seasonal in nature. Historically, the company experiences a decrease in demand for its services during the first and third quarters, the post-winter holiday and summer vacation seasons. The company traditionally experiences its highest volume in the fourth quarter due to the holiday season. The seasonality of the company’s sales may cause a variation in its quarterly operating results, and a significant decrease in second or fourth quarter revenues may have an adverse effect on the company’s results of operations for that fiscal year. However, local Middle East and Islamic holidays vary from year-to-year, as a result, the Company’s seasonality may shift over time. Results of Operations The following table sets forth -for the periods indicated- the percentages of total revenues represented by certain items reflected in the company’s consolidated statements of income: Revenues 2004 2005 2006 2007 2008 % % % % % International express 42.5 43.2 32.2 29.1 29.3 Freight forwarding 35.4 33.1 44.8 46.2 43.9 Domestic express 13.4 14.2 13.0 12.6 14.2 Logistics 0.5 0.9 3.9 6.0 6.4 Publications and distribution 4.3 3.9 2.5 2.0 1.7 Others 3.9 4.7 3.6 4.1 4.5 Total Revenues 100.0 100.0 100.0 100.0 100.0 Shipping costs 54.5 52.4 54.6 53.2 50.1 Gross profit 45.5 47.6 45.4 46.8 49.9 Operating expenses 13.5 14.0 14.1 15.1 17.5 Selling, general and administrative expenses 23.7 23.5 23.4 23.8 23.9 Operating income 8.4 10.1 8.0 8.0 8.4 Income before income taxes 8.4 10.4 8.3 8.4 8.7 Provision for income taxes 0.5 0.5 0.3 0.5 0.5 Minority interests 1.0 1.2 1.0 1.1 1.1 Net Income 6.9 8.7 7.0 6.8 7.1
Annual Report 2008 IX Impact of Inflation and Currency Fluctuations The company does not believe that inflation or currency fluctuations have had a material adverse effect on revenues and results of operations. However, demand for the company’s services is influenced by general economic conditions, including inflation and currency fluctuations. Periods of economic recession, high inflation or devaluation of currencies -in countries in which the company operates- could have a material adverse effect on the express and freight forwarding industry and the company’s results of operations. Strategy The company’s strategy comprises of the following key elements aimed to grow Aramex into the top five global logistics and transportation service providers: Geographic Expansion through Acquisitions: Expand into key geographic areas that are main pillars in global trade through acquisitions. Such acquisitions will secure the Global Distribution Alliance, develop a more secure global network and provide Aramex with sources for growth. Globalizing the Brand through Franchising: To supplement the acquisition strategy, Aramex plans on expanding its brand by franchising in developing countries. This will provide Aramex with a revenue stream and expand the brand with minimal capital requirement. Leveraging Existing Infrastructure: To further leverage the existing regional infrastructure, Aramex plans on expanding its supply chain management and document storage services to existing Aramex locations within the Middle East and South Asia, and to continue to invest in the company’s logistics infrastructure in the region. Organic growth: The company plans to continue to capitalize on its reputation as a quality service provider offering a one-stop shop of transportation and logistics solutions. A large part of this strategy involves the continued development by the company of customized solutions for its clients in the areas of (i) Express and freight transportation solutions by air, sea and land (ii) Warehousing (iii) Value added logistics services and (iv) Supply chain solutions Continued emphasis on technology: The company continues to invest in technology to increase the efficiency of its operations, enhance the quality of service, increase sales and foster growth. The company believes that constant improvements in its communications network and information systems, such as linking all of the company’s offices via an on-line, real-time communications network, and the ability of customers to have direct connectivity to the Company’s network, will yield continued improvements in the quality and efficiency of the operational and customer service processes which in turn will improve the company’s operational results. Board of Directors The following table sets forth the names of the Company’s Directors: Name Position Mr. Abdullah Mazrui Chairman Mr. Fadi Ghandour Founder, Chief Executive Officer and Director Mr. Helal Al Merri Director Mr. Ahmad Al-Badi Director Mr. Arif Naqvi Director Sheikh Tareq Qassimi Director Mr. Ayed Aljeaid Director Mr. Mohammed Ali Al Hasimi Director
Page 4: Mission and Purpose Mission To be r
Page 7: Reach has no limits We continue our
Page 11: Tomorrow has no limits The year fol
Page 14 and 15: Innovation has no limits Our innova
Page 16 and 17: Hope has no limits We contribute to
Page 18 and 19: and our support of the Arab Fund fo
Page 20 and 21: Selected Financial Data Annual Repo
Page 22 and 23: Annual Report 2008 Wholesale expres
Page 26 and 27: Aramex PJSC and its subsidiaries Co
Page 28 and 29: Directors’ Report Dear Shareholde
Page 30 and 31: Aramex PJSC and its subsidiaries Co
Page 32 and 33: Consolidated statement of cash flow
Page 34 and 35: Consolidated statement of changes i
Page 36 and 37: Notes (Continued) 3- Significant ac
Page 42 and 43: Notes (Continued) 4- Financial risk
Page 44 and 45: Notes (Continued) 7- Cost of servic
Page 46 and 47: Notes (Continued) 12- Income taxes
Page 48 and 49: Notes (Continued) 14- Goodwill 2008
Page 50 and 51: Notes (Continued) 19- Trade receiva
Page 52 and 53: Notes (Continued) 24- Loans and bor
Page 54 and 55: Notes (Continued) 28- Other current
Page 56 and 57: Notes (Continued) 33- Information a
Page 58 and 59: Notes (Continued) 35- Financial ins

Annual - Aramex

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