August 25, Month Fair Value: AED Recommendation: BUY-Risk Level**: 3. Reason for Report: 1H2008 Update

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1 August 25, 2008 Key Data * Price as of close on August 24, Sources: Reuters, Zawya, and NBK Capital Rebased Performance Sources: MSCI, Reuters, and NBK Capital Key Ratios a = actual, f = forecast. Sources: Reuters and NBK Capital Analysts Current Price* AED Week High AED Week Low AED 1.96 Reuters ARMX.DU Samir Murad, CFA Direct: samir.murad@nbkcapital.com Badder Al Ghanim Direct: badder.alghanim@nbkcapital.com Avg. Value Traded per Day AED 26.0 mln Market Cap AED 2.4 bln Current Number of Shares 1,210 mln Bloomberg ARMX UH Ownership Structure Privately Held: 45% Public: 55% 1.50 Aug-07 Nov-07 Feb-08 May-08 Aug-08 2Q2008 EBITDA a AED 58.7 mln 2Q2008 EBITDA f AED 53.4 mln Aramex MSCI UAE 2007 a 2008 f 2009 f 2010 f 2011f P/E EPS Growth 28% 22% 19% 24% 27% EV/ EBITDA EBITDA Margin 10% 10% 11% 11% 12% EBITDA Growth 33% 25% 17% 19% 19% Dividend Yield 0.0% 3.1% 3.7% 4.6% 5.9% ROAE 10% 11% 12% 14% 16% 3Q2008 EBITDA f AED 50.9 mln 4Q2008 EBITDA f AED 58.7 mln Highlights 12-Month Fair Value: AED 3.10 Recommendation: BUY-Risk Level**: 3 Reason for Report: 1H2008 Update Aramex reported total revenue of AED 1.03 billion in 1H2008, a 23.4% increase over the same period last year, and 5.5% above our forecast of AED 979 million. The international express segment of Aramex was able to record a 22.8% increase in revenue year-on-year, a result that deviates from the global trend of declining express business. In terms of profitability, EBITDA increased by 19.1% in 1H2008, year-on-year, to AED million 8.6% higher than our forecast of AED million. The bottom line grew by 16.9% to AED 74.2 million in 1H2008. This growth was at a slower pace than the growth in EBITDA, due to a 62% decline in interest income. We think the recent decline in the share price of Aramex is to a certain extent influenced by the weakening express business of the major global players (UPS, FedEx, DHL and TNT). However, Aramex is on a different playing field, as the majority of the company s express business is based in the MENA region. Regional dynamics have made Aramex immune to this global trend. We have revised our forecasts for Aramex to reflect the higher level of prices and the improved margins. Also, we have further improved our outlook for the logistics business, which once again continues to exceed our expectations. Our 12-month fair value estimate for the share price of Aramex is AED To arrive at this fair value estimate, we used a combination of discounted cash flow (DCF) and peer comparisons based on forward price/earningsto-growth (PEG) multiples. Following the recent decline in the share price of Aramex, we believe the stock is currently trading at attractive levels. Our fair value is 57% higher than the close on August 24, 2008, and our new recommendation is Buy. ** Please refer to the last page for recommendations and risk ratings.

2 Valuation The top line and EBITDA posted by Aramex in 1H2008 were 5.5% and 8.6%, respectively, higher than our forecast. This strong result was influenced by higher rates across major segments, which led to improved margins. We have revised our FY2008 numbers to include this stronger-than-expected performance. Regarding our long-term view, we made some changes to our forecast to reflect a) higher rates, b) improved margins and c) our improved outlook for the logistics segment. Our 12-month fair value estimate for the share price of Aramex has increased by 12.2% to AED 3.10 (our old fair value estimate in Figure 1 has been adjusted for a 10% bonus share issue). This change was driven primarily by a 14.9% increase in the fair value derived from our discounted cash flow (DCF) model, as we made some revisions to our forecasts. Also, we had a 6% increase in the fair value based on forward PEG multiples. Our new fair value is 57% higher than Aramex s latest share price; hence, our new recommendation is Buy. Figure 1 Fair Value per Share Our new 12-month fair value for Aramex is AED 3.10 Valuation Method Old New Weight Value Weight Value Change Discounted cash flow 70% AED % AED % Peer comparison 30% AED % AED % Weighted average fair value 100% AED % AED % Source: NBK Capital 1H2008 Performance Aramex reported total revenue of AED 1.03 billion in 1H2008, a 23.4% increase over the same period last year, and 5.5% above our forecast of AED 979 million. Part of the increase in revenues is a result of an increase in rates (across all major segments), a mechanism used by Aramex to offset the increase in operating costs due to increased fuel prices and overhead expenses. Contrary to its global peers, which have been experiencing declines in their express business, the international express segment of Aramex was able to record a 22.8% increase in revenue year-on-year. This higher-than-expected increase for the segment is partially due to higher rates. The best segmental performance came from the logistics segment which accounts for only 6.4% of total revenue as it grew by 38.5% in 1H2008 over 1H2007. The logistics segment had a substantial quarter-on-quarter increase of 16.6% in 2Q2008 compared with 1Q2008. This impressive increase was a result of a general hike in rates implemented by Aramex, as well as signing some high-yielding projects. This segment operates on a project basis; hence, even though it is currently running at close to capacity, the dynamic nature of the business allows for completed projects to be replaced with new ones, which can have different yields. The performance of the logistics segment was 20% higher than our forecast for 1H2008. NBK Capital Page 2 of of 6

3 The logistics segment also experienced a considerable increase in profitability, as it recorded a gross profit margin of 77.5% in 1H2008, almost six percentage points higher than the gross profit margin in 1H2007. At the group level, Aramex was able to post a higher-than-expected gross profit margin of 49.2% in 1H2008, higher than our forecast of 46.8%. This stems from the company s success in passing increases in operating costs (both fuel and overhead) to clients. However, other operating costs as a percentage of revenue were also higher than expected, as they represented 16.9% of revenues compared to our forecast of 14.8%. This increase in other operating costs is a reflection of the impact high inflation in the MENA region is having on Aramex. EBITDA increased by 19.1% in 1H2008, year-on-year, to AED million 8.6% higher than our forecast of AED million. Also, Aramex achieved an EBITDA margin of 10.7% in 1H2008, which is in line with our forecast of 10.4%. Net income grew by 16.9% to AED 74.2 million in 1H2008, a rate lower than the growth in EBITDA. This is because Aramex had a 62% decline in interest income. According to management, the decline in interest income is a result of a redistribution of the cash balance among some of the regional currencies. Figure 2 1H2008 Performance Income Statement (AED Thousands) First Half Results Common Size Change 1H2007 1H2008 Net income grew by 16.9% to AED 74.2 million in 1H2008 International Express 245, , % 29.4% 29.2% Freight Forwarding 378, , % 45.2% 44.2% Domestic Express 108, , % 13.0% 14.0% Logistics 47,984 66, % 5.7% 6.4% Others 55,940 64, % 6.7% 6.2% Total Revenue 837,081 1,033, % 100.0% 100.0% Cost of Revenue 440, , % 52.6% 50.8% Gross Profit 396, , % 47.4% 49.2% Selling/General/Admin. Expenses, Total 179, , % 21.5% 21.6% Other Operating Expenses, Total 123, , % 14.8% 16.9% EBITDA 92, , % 11.1% 10.7% Depreciation/Amortization 16,987 21, % 2.0% 2.1% Operating Income 75,870 89, % 9.1% 8.6% Interest Income(Exp), Net Non-Operating 2, % 0.2% 0.0% Other, Net 1,077 1, % 0.1% 0.1% Net Income Before Taxes 79,020 90, % 9.4% 8.8% Provision for Income Taxes 4,363 4, % 0.5% 0.4% Minority Interest 11,218 12, % 1.3% 1.2% Net Income 63,439 74, % 7.6% 7.2% Sources: Aramex and NBK Capital Outlook The high level of fuel prices (compared to fuel prices just a few years ago) and the slowdown in global GDP growth has caused some severe damage to the express business of the large freight transporters (UPS, DHL, FedEx and TNT). All the big players have reported declines in express volumes in the second quarter of 2008, and the expectations are that this trend will continue if fuel prices remain high. Customers of these companies are shifting NBK Capital Page 3 of of 6

4 from air express to other less costly, slower ground alternatives, such as rail and LTL shipping. We think the recent decline in the share price of Aramex may be due to investors anticipating a similar situation for its express segment. However, we believe Aramex is on a different playing field because the majority of its express business is based in the MENA region, where regional dynamics make it immune to this trend. There are two major factors allowing us to remain bullish on the express segment of Aramex: Unlike the rest of the world, the MENA region (and the GCC in particular) is in a state of economic expansion. Thus, Aramex customers are seeing their businesses grow rather than contract, which allows them to afford the price increases. Also, many of the MENA countries are experiencing a high level of inflation (many reaching double digits), and accordingly the cost of shipping is not the only expense they see growing rapidly. Another factor in favor of Aramex is the fact that MENA-based customers have few alternatives to the express business. For example, there is no rail network that connects the MENA countries, which means that the only ground alternative is trucking. Trucking may be a feasible alternative between adjacent countries, but can become troublesome if parcels need to be transported across several countries. Border checks and custom clearances can become an issue for the shipper and may be more worrisome than the cost of fuel. The numbers Aramex posted in 2Q2008 reflect what we have discussed above. Revenues from the express business have grown by 21.1% in 2Q2008. According to management, this was a combination of an increase in prices and volume. Also, the gross profit margin for the express business increased from 58.2% in 2Q2007 to 60.1% in 2Q2008. In our opinion, this reflects Aramex s ability to pass on the increase in fuel costs to its customers. How Will Aramex Cope in a Bear Scenario? Even though high fuel prices act as a catalyst for economic growth in Aramax s core markets, there might be a threshold whereby increases in fuel prices would lead to a reduction in volume in the express segment. In such a scenario, we expect to see some shift in volume from express to freight forwarding (both ground and air) for Aramex. Aramex s set-up as an asset-light company will be an advantage in such a scenario, as it can quickly increase or reduce the capacity of the various segments. Since Aramex does not own the assets that transport the cargo (aircraft or trucks), this means that most of its costs are variable. Accordingly, a reduction in the volume of the express segment would lead to a reduction in revenue, but will not majorly impact the segment s margins. The impact on the overall margins will depend on the size of the shift in volume of the various modes of transport, because freight forwarding is a low-margin business compared with the express business. NBK Capital Page 4 of of 6

5 FINANCIAL STATEMENTS Balance Sheet (AED Thousands) Historical Forecast Fiscal Year Ends December ASSETS Cash and Short-Term Investments 222, , , , , , , ,944 Total Receivables, Net 261, , , , , , , ,669 Prepaid Expenses 21,769 26,414 32,288 37,259 42,824 47,839 51,925 55,472 Other Current Assets, Total 56,561 69,571 81,795 94, , , , ,530 Total Current Assets 562, , , ,563 1,004,616 1,209,691 1,413,978 1,631,615 Property/Plant/Equipment, Total - Net 128, , , , , , , ,593 Goodwill, Net 803, , , , , , , ,399 Intangibles, Net 3,613 3,493 3,493 3,493 3,493 3,493 3,493 3,493 Other Long-Term Assets, Total 14,382 20,964 23,060 25,366 27,903 30,693 33,763 37,139 TOTAL ASSETS 1,512,416 1,674,835 1,875,851 2,029,334 2,227,332 2,458,811 2,695,429 2,950,239 LIABILITIES & EQUITY Accounts Payable 131, , , , , , , ,362 Short-Term Debt (Balancing Debt) 27,435 20, Current Port. of LT Debt/Capital Leases 8,306 13,056 16,320 20,400 25,500 31,875 39,844 49,805 Other Current Liabilities, Total 123, , , , , , , ,362 Total Current Liabilities 290, , , , , , , ,529 Long-Term Debt 13,379 14,707 17,648 19,413 20,384 21,403 22,473 23,597 Deferred Income Tax Minority Interest 19,287 25,444 26,716 28,052 29,455 30,927 32,474 34,097 Other Liabilities, Total 41,073 39,428 47,314 52,045 55,168 58,478 61,986 65,706 Total Liabilities 364, , , , , , , ,884 Total Equity 1,148,196 1,285,177 1,433,621 1,536,177 1,667,865 1,836,950 2,018,539 2,221,356 TOTAL LIABILITIES AND EQUITY 1,512,416 1,674,835 1,875,851 2,029,334 2,227,332 2,458,811 2,695,429 2,950,239 Income Statement (AED Thousands) Historical Forecast Fiscal Year Ends December Total Revenue 1,363,803 1,783,788 2,152,508 2,483,961 2,854,956 3,189,255 3,461,637 3,698,162 Cost of Revenue 743, ,132 1,106,058 1,279,725 1,464,248 1,628,632 1,756,164 1,861,025 Gross Profit 619, ,656 1,046,450 1,204,236 1,390,708 1,560,623 1,705,472 1,837,137 Selling/General/Admin. Expenses 293, , , , , , , ,614 Depreciation/Amortization 24,846 35,604 46,180 57,697 58,765 56,718 57,547 58,808 Other Operating Expenses, Total 191, , , , , , , ,649 Operating Income 109, , , , , , , ,066 Interest Income (Exp), Net Non-Operating 5,255 3, ,063 7,660 11,172 16,132 21,844 Other, Net (1,135) 3,566 1, Net Income before Taxes 113, , , , , , , ,910 Provision for Income Taxes 4,437 9,450 8,943 10,547 12,950 16,194 18,557 20,945 Net Income after Taxes 109, , , , , , , ,964 Minority Interest (13,780) (19,515) (21,467) (23,613) (25,974) (28,572) (31,429) (34,572) Net Income 95, , , , , , , ,392 Cash Flow (AED Thousands) Historical Forecast Fiscal Year Ends December Cash from Operating Activities 78, , , , , , , ,642 Cash from Investing Activities (212,871) (91,726) (100,012) (139,769) (87,652) (67,474) (69,264) (69,675) Cash from Financing Activities 15,774 (33,513) (36,502) (92,297) (108,617) (131,558) (162,311) (184,440) Foreign Exchange Effects 635 (427) Net Change in Cash (117,798) 16,294 48,777 (18,833) 70, , , ,527 Sources: Annual Report and NBK Capital NBK Capital Page 5 of of 6

6 NBK Capital Kuwait Head Office 17th Floor, Dar Al-Awadi Building Ahmed Al-Jaber Street, Sharq P.O. Box 4950, Safat Kuwait Tel: Fax: International Network United Arab Emirates NBK Capital Limited Precinct Building 3, Office 404 Dubai International Financial Center P.O. Box , Dubai United Arab Emirates Tel: Fax: Turkey NBK Capital Arastima ve Musavirlik AS SUN Plaza, 30th Floor Dereboyu Sk. No.24 Maslak 34398, Istanbul, Turkey Tel: Fax: NBK Capital MENA Research Tel: Fax: menaresearch@nbkcapital.com Disclaimer This document and its contents are prepared for your personal information purposes only and do not constitute an offer, or the solicitation of an offer, to buy or sell a security or enter into any other agreement. Projections of potential risk or return are illustrative, and should not be taken as limitations of the maximum possible loss or gain. The information and any views expressed are given as of the date of writing and subject to change. While the information has been obtained from sources believed to be reliable, we do not represent that it is accurate or complete and it should not be relied on as such. Watani Investment Company (NBK Capital), its affiliates and subsidiaries accept no liability for any direct, indirect or consequential loss arising from use of this document or its contents. At any time, the employees of NBK Capital and its affiliates and subsidiaries may at their discretion hold a position, subject to change, in any securities or instruments referred to, or provide services to the issuer of those securities or instruments. NBK Kuwait Abdullah Al-Ahmed Street P.O. Box 95, Safat Kuwait City, Kuwait Tel: Fax: Telex: NATBANK International Network Bahrain Bahrain Branch Seef Tower, Al-Seef District 428 P.O. Box 5290, Manama Bahrain Tel: Fax: Jordan Amman Branch Shareef Abdul Hamid Sharaf St P.O. Box Shmeisani, Amman Jordan Tel: Fax: Saudi Arabia Jeddah Branch Al-Andalus Street, Red Sea Plaza P.O. Box Jeddah 21444, Saudi Arabia Tel: Fax: Lebanon National Bank of Kuwait (Lebanon) SAL BAC Building Justinian Street, Sanayeh P.O. Box , Riyad El Solh Beirut , Lebanon Tel: / Fax: / Risk and Recommendation Guide Low Risk Iraq Credit Bank of Iraq Street 9, Building 178 Sadoon Street, District 102 P.O. Box 3420 Baghdad, Iraq Tel: / / Fax: Egypt Al Watany Bank of Egypt 13 Al Themar Street Gameat Al Dowal AlArabia Fouad Mohie El Din Square Mohandessin, Giza, Egypt Tel: / Fax: United States of America New York Branch 299 Park Avenue New York, NY USA Tel: Fax: United Kingdom National Bank of Kuwait (International) Plc Head Office 13 George Street London W1U 3QJ, UK Tel: Fax: NBK Investment Management Limited 13 George Street London W1U 3QJ, UK Tel: Fax: France National Bank of Kuwait (International) Plc Paris Branch 90 Avenue des Champs-Elysees Paris, France Tel: Fax: Singapore Singapore Branch 9 Raffles Place #51-01/02 Republic Plaza Singapore Tel: Fax: Vietnam Vietnam Representative Office Room 2006, Sun Wah Tower 115 Nguyen Hue Blvd, District 1 Ho Chi Minh City Vietnam Tel: Fax: China Shanghai Representative Office Suite 1003, 10th Floor, Azia Center 1233 Lujiazui Ring Road Shanghai China Tel: Fax: Associates Qatar International Bank of Qatar (QSC) Suhaim bin Hamad Street P.O. Box 2001 Doha, Qatar Tel: Fax: Turkey Turkish Bank Valikonagl CAD. 7 Nisantasi 34371, Istanbul, Turkey Tel: Fax: Recommendation Upside (Downside) Potential Buy more than 20% Accumulate between 10% and 20% Hold between -5% and 10% Reduce between -10% and -5% Sell less than -10% Risk Level High Risk Copyright Notice: This is a publication of NBK Capital. No part of this publication may be reproduced or duplicated without the prior consent of NBK Capital.