Amid softening of global shipment volumes, Aramex continued to deliver a resilient performance in the first quarter of 2023, while making further progress in executing its strategy. Revenue totaled AED 1.43 billion, down marginally by 1% YoY, outperforming global peers.
Gross Profit improved 4% YoY to AED 358 million in Q1 2023, driven by consolidated growth in the International Express business – with the MyUS acquisition providing a further boost. This reflects Aramex’s consistent investment in efficiency maximizing initiatives and cost optimization through the economic cycle.
EBITDA for Q1 2023 decreased 9% to AED 153 million, and Net Profit was AED 24 million, compared to AED 47 million in Q1 2022. The YoY decrease in Net Profit is 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.
Freight-Forwarding and Logistics and Supply Chain Solutions Businesses performed strongly with 17% and 23% increases in Gross Profit respectively, strengthening the mix of quality revenues across the Group. International Express also improved Gross Profit by 3%, while Domestic Express declined by 6% due to domestic revenue decline of 4% which is attributed to FX impact.
Despite inflationary pressures, Selling, General and Administrative Expenses (SG&A) organic structure- which excludes MyUS, as a percentage of revenue remains stable. While consolidated SG&A increased by 6% YoY due to the addition of MyUS, the organic SG&A declined by 3%, reflecting the Group’s agility in cost management. Tight cost control and continued investment is expected to improve returns in the second half of the year.
Aramex’s strategically balanced geographical presence enabled the Company’s home markets to continue their strong performance, with the GCC accounting for 39% of total revenues, while also supporting solid revenue growth in Europe and North American outbound markets.
Robustly positioned with a healthy cash balance and low leverage with Net Debt-to-EBITDA ratio at 2.3x. Geographic and business diversification continued to support resilience in margins and performance vs peers, alongside strong road network and operational efficiencies.
In line with the five-year strategy, the Group is focused on mid- and long-term growth, while continuing to attract talent and champion investments in innovation and technology.
