Aramex has received approval from its Board of Directors’ to sell its 60% stake in its joint venture with Australia Post, “Aramex Global Solutions (AGS)”, to Australia Post, for US $20 million.
The decision to sell came as a mutually agreed transaction that will allow both organizations to independently execute their strategic growth in the booming global e-commerce industry.
In 2016, Aramex and Australia Post partnered to create AGS to serve as an e-commerce delivery platform, with a particular focus on connecting the Australian e-commerce market with sellers in Asia.
Aramex currently owns the majority of the joint venture, with a 60% stake and the remainder 40% are held by Australia Post.
Upon completion, the divestment will not have any impact on Aramex revenues since the JV was only accounted for on equity basis. However, it will incur a one-off write-off of US $13 million for Aramex, which will be reflected in the Company’s Q4 2018 financial results.
“We have mutually agreed with our trusted partners, Australia Post, to sell to them our full 60% stake in AGS,” said Bashar Obeid, Chief Executive Officer of Aramex. “The divestment will not affect our e-commerce growth strategy. The global e-commerce market continues to grow at a strong rate, transforming our industry and presenting huge opportunities for us to expand our business in our target markets.”
“We will continue to tap into this growth by enhancing our last mile delivery solutions and further improving service levels through investments in technology and digitization,” he added.
One of the key contributors to the company’s strong Q3 2018 results was the boom in e-commerce.
In the third quarter Aramex had reported revenue for the three-month period ended September 30th 2018 of AED 1.2-billion, up 8% year-on-year and a net profit of AED 113 million, a 38% jump from Q3 2017.