Aramex Sees Net Profit Growth of 42% in Q4 2022; 9% for Full Year
Aramex a leading global provider of comprehensive logistics and transportation solutions, today announced its preliminary financial results for the Fourth Quarter (Q4) and Full Year (FY) ending 31 December 2022.
The preliminary financial results and other information disclosed are related to the Company’s Q4 2022 and FY 2022 performance are unaudited preliminary numbers and therefore, are subject to change.
In Q4 2022, Aramex concluded the acquisition of MyUS, a global technology-driven platform that enables cross-border e-commerce.
Aramex’s FY 2022 Revenue was broadly in line with the 2021, while Q4 2022 Revenue decreased 5% YoY to $420 million. Growth in key regions including the GCC and other MENAT countries was offset by weaknesses in other markets, impacted by lockdowns in China, overall slower economic growth and lower consumer confidence as well as the global inflationary environment.
Revenue was also impacted by currency devaluation in some operating countries, primarily in Lebanon and Egypt.
Financial results were normalized to give a like-for-like comparison to 2021; and therefore, they exclude MyUS performance, transaction costs related to the acquisition and other extraordinary items mostly related to the logistics product.
The improvement in Reported Gross Profit in the last three months of the year was primarily driven by the Company’s disciplined cost management approach and operational enhancement initiatives.
Normalized Net Profit for the full year was up 9% YoY owed in large part to the Company’s efforts to drive operational efficiencies underpinned by expansionary GCC economies, increase in industrial activities in the region and resilient consumer spending.
Aramex ended the year with a strong cash balance of $209 million, which was stable compared to last year.
Othman Aljeda, Chief Executive Officer, Aramex, said: “We ended the year as a stronger and more agile business with four well defined products and a clear growth strategy for the next five years.
"In 2022 we stabilized our gross profit margin for the group, as well as for our domestic and international express products; we grew our freight product by 27% while increasing its gross profit by 51%, and for our logistics product, we focused on quality revenue and reached 85% utilization of our warehouses while increasing gross profit by 58%.
"This was supported by the solid growth in our home markets in the GCC and other MENAT countries, which also contributed to a good performance in our main outbound markets including the US and UK.
"We now have a more diversified customer base than ever before, with no single customer making up more than 7% of our revenue, thus reducing our concentration risk.
"The strong performance of our Freight-Forwarding product contributed significantly to our top and bottom line in 2022. This is attributed to the implementation of our B2B growth strategy and investments in talent and competencies to deliver on it, while capitalizing on market opportunities.
"Today, our Domestic and Express products are more efficient and digitized. We modernized our core systems and infrastructure, deployed a secure cloud-based integration platform, and introduced new chatbots to enhance the customer journey.
"What has always set Aramex apart is its people, their passion, commitment and bringing their individuality in ways that inspires collective development. 2022 marked the anniversary of 40 years of Aramex operations.
"I would like to take this opportunity to thank my team and all Aramexians for their valuable contributions to the business. My sincere gratitude extends to our Board of Directors for their leadership and guidance, to our shareholders for their trust and to our partners and customers for their support.”
Commenting on the future outlook, Othman Aljeda continued: “We remain confident in the economic prospects of our home markets in the GCC and MENAT, benefitting from good GDP projections, young populations and fantastic growth opportunities.
"We are looking forward to contributing to this growth by supporting trade across key lanes and delivering what matters most to our customers. 53% of our global revenue originates from these two regions. Accordingly, we are strengthening our sales teams with new hires in 2023.
"Looking ahead, our 5-year business strategy provides us with a clear roadmap to grow our business and deliver long term value for all our stakeholders.
"For our Freight-Forwarding product, we will further build our expertise and competencies. For our Logistics product, we are almost doubling our warehousing space by 2027 to accommodate the growth in our business.
"Meanwhile for our Domestic and International Express business, we will continue to focus on protecting our margins and boosting operational efficiencies, while continuing to grow our key verticals across SMEs, e-commerce, retail and more.”