By: Mahmoud Gamal
Dubai – Mubasher: The transportation companies’ revenues may be affected by oil prices, which hit $70 per barrel (pb), analysts told Mubasher.
These companies’ disclosures are likely to report varied results in the fourth quarter of 2017 based on the diversity of the UAE's transportation sector and how companies have dealt with the recent increase in oil prices, said Fadi Al-Ghattis, MindCraft Consultants’ CEO.
The positive forecasts of oil prices will, definitely, put further pressure on the transportation firms and costs they incur, especially Aramex and Gulf Navigation, Al-Ghattis added.
Gulf Navigation
Gulf Navigation made it through the diplomatic dispute between Qatar and the Arab quartet and a delicate restructure programme and recovered, hence, more profits are on the way, Al-Ghattis commented.
Air Arabia
Air Arabia will see good results in Q4-17 versus the year-ago period on the back of higher revenues generated through the increased number of tourists during summer and holidays seasons, Tariq Qaqish, managing director of asset management at MENACORP, noted.
The company still has both high occupancy rate and significant expansion plans, Qaqish stated, adding that Air Arabia maintains a reasonable hedge policy against the raising of oil prices.
Aramex
Profits of the Dubai-based logistics company are likely to shrink in the three-month period ended 31 December 2017 due to the increase in costs, which was triggered by the rising oil prices, Qaqish continued.
However, having an expert such as Mohamed Alabbar in the company’s board will boost the profits, the managing director remarked.
The UAE’s transportation sector is facing various challenges in 2018, one of them is the recently imposed value-added tax (VAT), which will weigh on the companies’ revenues, the analyst concluded.
Translated by: Muhammad Khalid
