Aramex Revenues Stable at $1.2 Billion for First 9 Months of 2022
Aramex, a leading global provider of comprehensive logistics and transportation solutions, has announced its financial results for the third quarter (“Q3”) and nine months (“9M”) ending 30 September 2022.
Nine month revenue reached $1.2 billion, relatively unchanged from the reported for fisr 9 months of 2021.
The solid performance in Freight Forwarding was offset by the softness in the Courier offering, which is attributed to lower volumes in Oceania and North Asia. Revenue was also impacted by the devaluation of currencies in certain markets.
GP margin for the Group was 22.5% in Q3 2022 and 23.8% for the nine-month period. The Courier GP margin was stable at 30% in Q3 2022, and it is important to note that the Shop & Ship product delivered the highest GP margin since Q1 2021.
Freight Forwarding delivered a 2-point improvement in GP margin to 14% in the first nine months of the year 2022, while Logistics was impacted by one-offs associated with the restructuring in this product which is expected to be completed by end of 2022, as the Company remains focused on quality revenue customers only.
Despite inflationary pressures, nine months 2022 EBITDA margin was solid at 10.6%, driven by the Company’s cost optimization initiatives. Aramex’s disciplined approach to cost management lowered Operating Expenses (OPEX) during the reporting period, while maintaining investments to scale operations.
In Q3 2022, net profit from continuing operations increased 18% YoY to $10 million. Net profit from discontinued operations includes profits incurred in Q3 2021 from InfoFort sale last year.
Year to date, the Company has sustained a very healthy liquidity profile with consistent positive free cash flow, a cash balance of $173 million, and a debt-to-EBITDA ratio of 0.8x, excluding IFRS 16.
Aramex’s strong balance sheet will support the Company’s growth strategy including investments in digital and technological infrastructure as well as its active M&A pipeline.
Othman Aljeda, Chief Executive Officer of Aramex, said: “The strength and resilience of the GCC economies contributed to the stability of our top line year to date in 2022.
"In line with our strategic objectives, our revenue mix is now more diversified both in terms of contributions from the different business segments and from a more diverse customer base.
"Our diversified customer base has further reduced concentration risk, with our top customer currently contributing 7% of the Group’s total revenue.
"The Courier business remained resilient with a stable GP margin of 30%, supported by initiatives to improve operational efficiencies and the successful rollout of same-day deliveries and other premium services in the GCC.
"The Freight-Forwarding business continues to be our strong performer, registering double-digit growth in both the three-month and nine-month periods.
"We remain cognizant of global macro activity, and believe that our dominant position in the GCC, a region which is enjoying economic expansion and relatively optimistic consumer sentiment, will continue to support our resilient performance.
"Q4 2022 marks the first quarter that we are consolidating MyUS, a global technology-driven platform that enables cross-border e-commerce, into Aramex operations, and we look forward to unlocking further value over the long term through revenue and cost synergies.”