Aramex Reports Stable Revenues in Q1 2023
Aramex a leading global provider of comprehensive logistics and transportation solutions, today announced its financial results for the First Quarter (Q1) ending 31st March 2023.
Aramex’s Q1 2023 Revenues declined marginally by 1% YoY to $389 million, reflecting the robustness of its revamped operating model, amid global headwinds.
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 normalization of worldwide shipping flows.
However, despite softening revenues, the Company demonstrated resilience in volumes and improvements in margins.
For the Q1 2023 period, Gross Profit was up 4% to $98 million compared to $94 million in Q1 2022, while the corresponding Gross Profit Margin for Q1 2023 was reported at 25%.
The Selling, General and Administrative Expenses (SG&A) costs for the organic business, which excludes MyUS, declined 3% YoY, reflecting the Company’s disciplined cost optimisation drive, while consolidated Group SG&A costs increased by 6% 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% YoY to $6.5 million due to a mix of factors, including currency devaluation in certain markets, interest expenses associated with the 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.
Due to some negative FX and devaluation impact in some markets, Aramex moved swiftly to hedge exposures and move into more US Dollar-denominated contracts.
Aramex maintained a strong balance sheet position with Net Debt-to-EBITDA ratio of 2.3x and a healthy cash balance of $197 million as of 31 March 2023.
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.
"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 improvements in productivity.
"We maintain our commitment to invest in optimization measures across the economic cycle, including automation of shipments sorting process which enables us to boost operational productivity.
"And the newly launched Enterprise Automation & Robotic Process Automation Centre of Excellence that is focused on digitalizing the overall enterprise for higher efficiency levels within the support functions as well as across our operations.
"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 competitive advantage.
"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.”