ARAMEX Analysis_en

FINANCIAL STATEMENT ANALYSIS

Aramex CORPORATION

Jan. 2010

PREPARED BY: M. Yazeed El-Nazer, Wesam Zendah, and Saleem El-Khateeb

SUPERVISED BY: LECTURER: EMAD ABUSHAABAN

EXECUTIVE SUMMARY

Report Profile and Key Performance Indicators

The report covers the sustainability performance of Aramex for the 2006 calendar year. Where possible, data for preceding years is provided for comparison purposes.

The Aramex Sustainability Report 2006 is the company’s first

sustainability report. Social, environmental, health and safety, and other performances were not previously reported.

The report outlines commitments and targets for priority performance aspects for 2007. The company will report on its performance against these goals next year, and intends to issue a sustainability report annually.

Key Performance Indicators

The report references a set of Key Performance Indicators (KPIs). Many of the proposed KPIs have no previous measurement but nonetheless we have determined that these indicators will ultimately be more meaningful than indicators for which we could present current data. In 2007 we intend to establish baseline measurements of current performance for all KPIs.

Sustainability Issues, Key Performance Indicators, 3‐year and Long‐Term Goals

Based on our Sustainability Philosophy and Framework, we prioritized our key sustainability issues. We consider each of them important as we set aggressive performance indicators to achieve our goals. The following table lists our Key Performance Indicators and 3 year and long‐term targets.

History and Development of Aramex

The company is a provider of international and domestic express package delivery, freight forwarding, logistics and other transportation services primarily to, from and within the Middle East and South Asia. The company has expanded its presence in Europe by acquiring Two-Way Vanguard, a logistics and freight service provider that has offices in the Netherlands, Ireland and the United Kingdom. Historically, the majority of the company’s business has been derived from its international express package delivery operations.

The company believes that these international express delivery operations, combined with its network of stations, have provided the company with a solid infrastructure for the development of additional products, such as the company’s freight forwarding services, domestic express delivery services and shopping services.

Since its inception in 1982, Aramex has expanded its station/office network to include 309 offices in 200 major cities with more than 7,600

employees as of December 2008.

The company is a founding member and chair of the Global Distribution Alliance (GDA), comprising of over 40 leading logistics and transportation providers with over 12,000 offices worldwide, more than 66,000 employees, an excess of 33,000 vehicles and operations in more than 220 countries throughout the world. The Global Distribution Alliance is strategically positioned to provide swift and reliable global transportation solutions. Each individual member of the alliance provides extensive coverage and in-depth expertise in a different region of the world. Together, the members provide total world coverage with thorough local knowledge, ensuring an exceptional service in every corner of the globe. The alliance offers comprehensive tracking facilities utilizing state-of-the-art Aramex technology, allowing alliance members, agents and customers to track and trace their shipments anywhere in the world with the click of a button.

Aramex shares were traded on the NASDAQ Stock Market from January 1997 to April 2002 under the symbol “ARMX”. The company was acquired by a private equity firm pursuant to a U.S. cash tender that closed at the night of February 7, 2002 with approximately 96% of the outstanding shares validly tendered prior to the expiration of the offer. The acquisition was executed on a leveraged basis and the company was subsequently de-listed from NASDAQ on April 9, 2002.

On June 22, 2005 the company was acquired by Arab International Logistics PJSC, a publicly traded company on Dubai Financial Market that was later renamed to Aramex PJSC.

Business Overview

The following discussion provides a summary of the key services provided by the company:

International Express Delivery Services

Express shipments consist of small packages, typically ranging in weight from 0.1 kilograms to 50 kilograms, with time-sensitive delivery requirements. The company offers its international express delivery services to both retail and wholesale express accounts and offers its customers the ability to track their shipments on the World Wide Web through the company’s Web site (www.aramex.com).

Retail express delivery customers include trading companies, pharmaceutical companies, banks, service and information companies and manufacturing and regional distribution companies, and is not concentrated in any one industry.

Wholesale express delivery customers consist primarily of:

(a) other members of the Global Distribution Alliance,

(b) Express delivery

companies with express packages that have an Aramex destination and require Aramex’s network to deliver their shipments. The end-user

remains a customer of Aramex’s wholesale client.

Freight Forwarding Services

The company offers a wide range of freight forwarding services including air, land and ocean transport. Forwarding of loose cargo or consolidated freight, warehousing, customs clearance and break-bulk services and inter-modal transportation such as air/land, sea/land, etc., are some of the additional services on offer by Aramex today. Freight shipments typically have gross weights in excess of 50 kilograms on average.

These require more specialized handling and are normally less time-sensitive than express shipments. Aramex provides full “door-to-door” services from, to and within the Middle East, South Asia and Western Europe, mainly in the United Kingdom, Netherlands and Ireland.

A significant portion of the Company’s freight forwarding business involves consignee sales (or routed imports) and, to a lesser extent, exports by air, ocean and land modes.

Aramex launched its freight forwarding business in 1987 out of selected stations, and from 1993, at every Aramex station in the Aramex network. Whereas express shipments in the Aramex network virtually always pass through one of its international hubs or gateways, freight forwarding shipments are routed directly from origin to destination on board the operating carriers that are active on these routes or on the wings of the commercial lift available on city-pair basis around the globe. Usually the freight route is selected to best suit the size, weight and time-sensitivity of the shipment on hand.

The company continued in 2008 to expand the ground transportation portion of its freight forwarding business. Ground transportation shipments typically consist of a wide range of materials ranging from heavy-weight packages, high-value electronics, computer equipment and other similar electronic items, to heavy machinery and household goods that do not have as time-sensitive delivery requirements as the small packages sent by the Company’s express delivery system.

The inland service delivers shipments at lower costs than express delivery shipments or than the air freight delivery system. The Company usually delivers its ground transportation shipments by truck and inland hauling. The Company wet-leases most of the trucks it uses for these services today. Wet-leases are leases from local trucking companies of vehicles, drivers and other personnel needed to complete the service. Leases with owner-operator drivers is the system that worked best in 2008.

The company started providing such ground transportation and land freight services in 1998 through a network of trucking routes from Dubai, UAE, to each of Riyadh, Jeddah and Dammam in Saudi Arabia and Amman in Jordan. At present the company has expanded its ground transportation network in the Gulf Council Countries (GCC) by adding additional routes linking Dubai to each of Muscat (Oman), Kuwait City (Kuwait), Manama (Bahrain) and Doha (Qatar) and the rest of Saudi Arabia. This expansion included such routes as Dubai/Amman, Amman/ Beirut, Istanbul/Levant, Istanbul/Saudi and Cairo/Khartoum runs.

The company has also established extensions from several of these cities to surrounding areas. The company has focused on the expansion of its ground transportation network in the GCC due to its belief that such a region constitutes a number of highly under-developed markets with rising demand for “efficient” ground transportation delivery services between them. The company plans to further expand its ground transportation network in the Middle East at large and in the Gulf and Levant regions in particular, according to the increasing demands of its local and network clients.