Logistics giant Aramex said today it will make a non-recurring provision of $15.1 million for disruption caused to its business by the Beirut port explosion and a fire that blazed through warehouses in Morocco.
Both incidents occurred in the third quarter of the year. The August 4 blast, caused by ignition of 2,750-tons of stored ammonium nitrate in Lebanon’s Beirut, damaged the entire Aramex warehouse facility. Three storage units in Casablanca, Morocco, were damaged by a fire on September 22.
A non-recurring provision of $2.7 million is related to its Beirut facilities with a further $12.4 million related to the fire outbreak in Morocco, the company said in a filing to the Dubai Financial Market (DFM).
Aramex shares on the DFM were trading down by more than 2% in early trading after the company announcement.
“The company would like to notify the market that Aramex maintains comprehensive insurance coverage policies which should cover both incidents and that the company’s management has appointed a loss assessor to manage both claims with the respective insurance companies,” its statement said.
It added that it expects the insurance policies to cover the losses and damages but was making the provisions in line with the requirements of the International Financial Reporting Standards (IFRS).
In August, Aramex reported AED 94.4 million or 23% drop in second quarter profit, which it said was due to several “unforeseen costs prompted by the global onslaught of COVID-19.” Last year, the company reported AED 123 million for the same period.
Revenues for the quarter were up 4% to AED 1,332 million, compared to the same period last year. Overall shipment volumes grew by 26% owing to surge in e-commerce activities resulting from increased online shopping during pandemic related lockdown.
The company also reported increased demand for healthcare-related shipments.
