Aramex Q1 gross profit up 4% to hit AED358 million

DUBAI / WAM

Aramex on Thursday announced its financial results for the first quarter (Q1) ending on March 31. Aramex’s Q1 2023 revenues were driven by stable performance in international express and the resilience of the freight-forwarding and logistics and supply chain solutions businesses.
Revenue continued to be impacted by currency fluctuations, inflationary pressures, and normalisation of worldwide shipping flows. However, despite softening revenues, the company demonstrated resilience in volumes and margin improvements. For the Q1 2023 period, gross profit was up 4 percent to AED358 million compared to AED344 million in Q1 2022, while the corresponding gross profit margin for Q1 2023 was reported at 25 percent.
Aramex’s Q1 2023 revenues declined marginally by 1 percent YoY to AED1.43 billion, reflecting the robustness of its revamped operating model amid global headwinds. The selling, general and administrative expenses (SG&A) costs for the organic business, which excludes MyUS, declined 3 percent YoY, reflecting the company’s disciplined cost optimisation drive, while consolidated Group SG&A costs increased by 6 percent mainly due to the addition of MyUS. The group’s SG&A organic structure as a percentage of revenue has remained stable.
Net profit for Q1 2023 declined by 49 percent YoY to AED24 million due to a mix of factors, including currency devaluation in certain markets, interest expenses associated with MyUS acquisition and in line with Aramex’s strategy to leverage the balance sheet, as well as the softening at topline flowing through to the bottom line.
Aramex maintained a strong balance sheet position with net debt-to-Ebitda  ratio of 2.3x and a healthy cash balance of AED722 million as of March 31. Othman Aljeda, Chief Executive Officer, Aramex, said, “In a quarter when our industry globally continued to face headwinds from cost inflation, base rate rises, softening shipment volumes and FX fluctuations, we are proud to present a stable and resilient financial and business performance for the first three months of 2023. We continued to both drive revenue quality and benefit from our sustained investment in efficiency, and our performance vs industry means we are confident in unlocking the potential of our rebalanced business model.”
He continued, “Three of our four business lines increased gross profit year-on-year, and we maintained a stable profit margin in our domestic express business due to our relentless focus on cost control and productivity improvements. We maintain our commitment to invest in optimisation measures across the economic cycle, including automation of the shipments sorting process, which enables us to boost operational productivity.”
Aljeda said the continued growth in the GCC economies and the expectation that inflationary pressures around the world may peak and then decline significantly show some signs of optimism towards the end of the year. “We believe the key differentiator in the months ahead will be our ability to invest in technology, along with our geographic and business line diversification which offers a competitive advantage.”
He added, “We will continue to improve the efficiency of our services, enhancing customer experience, strengthening road networks, improving resourcing and making other targeted operational improvements across our four products – putting us in a strong position to capture market share and deliver long-term value for our shareholders.”