Aramex has announced its financial results for the First Quarter (“Q1”) ending 31st March 2024, including an 8% increase in revenues.
In Q1 2024, Aramex reported 8% year-on-year (YoY) increase in Group Revenues, with strong contributions from all product lines reflecting the strength of its diverse portfolio. International Express emerged as a key driver, delivering remarkable volume growth of 44% in Q1 this year compared to the same period in 2023, leading to a revenue increase of 14% YoY.
Domestic Express and Freight Forwarding were resilient, with Revenue growing by 5% and 3% YoY respectively. Logistics and Supply Chain Solutions maintained a stable performance in Q1 2024 compared to the same period last year, despite the challenges associated with currency devaluations in Egypt which negatively
Effective management of the Group’s Selling, General, and Administrative Expenses (SG&A) saw a modest 4% YoY increase in Q1 this year, primarily attributed to increased selling expenses, as well as annual employee compensation adjustments.
Group Gross Profit surged by 10% to AED 395 million, in the first quarter of 2024 compared to AED 358 million in Q1 2023. EBIT and EBITDA also displayed robust growth, expanding by an impressive 47% and 18% YoY respectively. These gains reflect the Company’s commitment to continuously streamline operations and maximize cost-effectiveness, also evident in improved margins across Gross Profit, EBIT, and EBITDA. Notably, the Gross Profit Margin for Q1 2024 stood at 26%, marking a 70-bps improvement from the same period previous year, while the EBITDA margin increased by 110-bps to 12% compared to Q1 2023.
The Net Profit for Q1 2024 nearly doubled, reaching AED 47 million, marking two consecutive quarters of strong performance. The Net profit margin improved to 3%.
Aramex maintained a strong balance sheet position with Net Debt-to-EBITDA excl. IFRS16 ratio of 0.8x and a healthy cash balance of AED 571 million as of 31 March 2024. The Company also improved its working capital and delivered record low DSOs during the quarter.
Othman Aljeda, Chief Executive Officer, Aramex, said: “Our International Express delivered a 44% increase in volumes YoY in Q1 2024, while Domestic Express delivered a 7% increase, with both driven by new customer wins, as well as seasonality during Ramadan. Our freight forwarding product grew volumes double digit across land, sea and air while our Logistics and Warehousing product continued to support customers with 3PL and 4PL activities ensuring efficient logistics and fulfillment of goods in key markets.
“During the first quarter of the year we injected significant volumes into our network while maintaining high service levels. I am proud of my team’s performance and commend the hard work of every Aramexian, for their dedication and capability to handle significant volume growth and heightened consumer activity, seamlessly delivering the level of service our customers value.
“Our ongoing investment in automation and operational optimization remains a core advantage and has ensured that our network is agile and responsive to our customer needs and market dynamics. Furthermore, our focus on technologies, such as last-mile route optimization, is yielding results, significantly enhancing operational efficiency. This strategic approach enables us to accommodate increased growth effectively. “
Commenting on the outlook for 2024, Aljeda continued: “Looking ahead, we anticipate Q2 and Q3 2024 to continue to deliver volume growth YoY, albeit at a softer rate compared to the levels seen during the peak seasons in Q1 2024 and in Q4 2023 due to seasonality. We will continue to manage our cost base and SG&A to ensure profitable growth. Our focus remains on working towards our long-term ambition, which involves delivering quality service and enhancing our operational efficiency to meet the evolving needs of all our stakeholders.”
Aramex on where the revenue is coming from
International Express reported consolidated Revenue of AED 646 million, marking a remarkable 44% increase in shipment volumes YoY, totaling 7.8 million shipments, a new quarterly record in volume numbers. Aramex showcased remarkable agility in scaling up and managing a substantial surge in volume in Q1 2024, while maintaining delivery KPIs and a high level of service, thanks to the dedication and hard work of its people and the Company’s sustained investments in automation, operational efficiencies and technological adoption.
The quarter benefited from new customer wins and early Ramadan seasonality, with notable expansion driven by ecommerce and banking sectors. Notably, the Gross Profit for Q1 2024 surged to AED 219 million, reflecting a 19% increase, while the Gross Profit Margin increased to 34%.
The significant increase in volumes led to improved margins, as fixed cost base did not escalate at the same pace. This underscores the efficiency and scalability of the Company’s network.
Domestic Express showcased resolute performance with healthy volume growth in Q1 2024 compared to the same period last year, and stable volumes compared to the peak season of Q4 2023. Revenue for Q1 2024 increased to AED 380 million, representing a 5% increase year-on-year over Q1 2023 and sequentially, over the previous quarter of Q4 2023. This can be attributed to enhancements in the turnaround strategy implemented in Oceania, along with the expanding e-commerce activities in several markets. Excluding the impact of currency translation, Domestic Revenue grew 9% in Q1 2024 compared to Q1 2023.
The Gross Profit Margin increased to 25% in Q1 2024 compared to same period last year, showcasing the company’s achievement in operational efficiencies, particularly in the ‘last mile,’ that enhanced courier productivity as well as the pick-and-drop network in key markets.
Aramex’s Freight-Forwarding business delivered a robust performance with Revenue growing by 3% YoY to AED 399 million in Q1 2024, while also showing improvement compared to the previous quarter of Q4 2023. Revenue growth comes from volume growth across all product lines, with air, sea and land freight growing volumes double digit compared to the same period last year.
Over the past year, rates have decreased globally across the industry due to competitive pressures, leading to lower profitability. This is reflected in the year-over-year performance of the business. The Company navigated the market environment by focusing on driving revenue on key lanes as well enhancing operational efficiencies. The Company improved financial performance across all key indicators in Q1 2024 compared to Q4 2023 delivering growth quarter on quarter.
Logistics and Supply Chain Solutions segment reported stable Revenues of AED 107 million, despite significant foreign exchange translation impact over recent quarters. Pertinently, the segment faced exchange losses in Egypt due to currency devaluation, however, when excluding the impact of currency translation, Revenue witnessed a growth of 1%.
Gross Profit was relatively stable, up 1% compared to Q1 2023, aligning with Revenue performance. The margin remained resilient at 15%, showcasing the segment’s ability to maintain consistency amidst challenging market conditions. The focus moving forward will continue to be on product rebalancing and building capacity in key markets.
