(Aramex's net profit figures for 2018 and 2017 in the second paragraph were corrected).

Shares in Dubai’s Aramex dropped in early trading on Thursday, minutes after the company posted its full financial results and proposed dividend payment for 2018.

The company reported a net profit attributable to equity holders of 492.6 million United Arab Emirates dirhams ($134 million) for 2018, compared to a net profit of 435.4 million dirhams for 2017, an increase of 13.1 percent.

Aramex’s board of directors have proposed a cash dividend of 16.5 percent of paid-up capital for the year 2018, compared to a dividend of 16.3 percent for the year 2017.

“The full year dividend at 16.5 fils is up by just 1% and translates into a payout ratio based on recurring earnings (excluding the loss of sale of Australia Post stake last year) of 45% compared to 55% for 2017 – so bit of a disappointment as far as dividends are concerned,” Ayub Ansari, senior analyst at Bahrain-based SICO told Zawya by email.

In 2016, Aramex and Australia Post partnered to create Aramex Global Solutions (AGS) to serve as an e-commerce delivery platform. In December 2018, Aramex announced that it has decided to sell its 60 percent stake in its joint venture to Australia Post, AGS., for $20 million. (Read more here).

“Still – the company is viewed more as a growth story rather than a dividend play – note 2018 recurring earnings were up by 24% YoY (year on year),” Ansari added.

He added that investors “could expect more acquisitions this year”, pointing out that the firm has already paid $80 million so far this year for a Saudi logistics company.

Aramex’s shares were trading 1.14 percent lower by 12:37 GST, but have gained 1.4 percent so far in 2019.

(Reporting by Gerard Aoun; Editing by Michael Fahy)

(gerard.aoun@refinitiv.com)

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