Aramex says it demonstrated resilience in the first half of 2023 and remains profitable in the face of weak market conditions despite its net profit falling to AED 42.8 million compared to AED 91.9 million in H1 2022.
Aramex said the business was stressed by a number of factors including adverse foreign currency headwinds as it reported revenues of AED 2.8 billion in H1 2023, a 5% decline YoY.
It added that in line with the global industry trend of softening volumes, the Q2 2023 Revenue also declined by 8%. However, excluding the currency exchange impact, the Q2 Revenue fell by 5%.
“Worth noting that Q2 2023 had fewer working days, mainly due to the shift of Islamic public holidays observed in certain markets during the quarter, compared to the same period of last year where these public holidays fell during Q3 2022,” said its financial statement.
Aramex maintained a robust Gross Profit Margin of 25% over both the half year and second quarter periods, despite a 3% and 9% YoY reduction in Gross Profit for H1 and Q2 2023 respectively.
“This tenacity reflects Aramex’s consistent investments in efficiency-maximizing initiatives and cost optimisation strategies, enabling the Company to navigate economic cycles with strength,” it added.
Cost management strategies proved to be effective with the consolidated Group Selling, General, and Administrative Expenses (SG&A) decreasing by 3% YoY through the Q2 2023 period.
This was complemented by organic SG&A (Selling, General and Administrative Expenses), which fell by 12% during the same quarter, “showcasing Aramex’s agility in cost control.”
The fall in net profit over the first six months of 2023 was reflected in a similar decline of 57% over the Q2 2023 period.
This decrease is attributed to a trickle-down impact from topline softening, as well as an increase in finance expenses associated with the MyUS acquisition, the global shipping and logistics company which it acquired in 2022.
“Reflecting on Aramex’s financial results for the first half of 2023, we performed robustly, despite continued challenges in an environment characterized by cost inflation, lower freight rates, softening shipment volumes and FX fluctuations,” said Othman Aljeda, CEO, Aramex.
“Therefore, our focus in the second half of the year will remain firmly on cost reduction and further efficiencies on Operating Expenses and SG&A, so that we can continue to be a very well-positioned, disciplined and agile business, with a strong balance sheet and key competitive strengths for the long-term.
“As a leading logistics provider, we recognize the need for agility and adaptability in today’s ever-evolving landscape. We continue to strategically invest in cutting-edge technologies, optimize our operations, and enhance our service offerings to meet the diverse and changing needs of our valued customers.
“This is evidenced by the productivity gains in our courier services and the doubling of our Pick-Up and Drop-Off (PUDO) network across the region. We will continue to reposition the business to higher margin accounts, including specialized verticals and more B2B business. We continue to focus on quality revenues and strategic growth to create long-term value for our stakeholders.
Our strategically balanced geographical presence remains a pillar of strength, with solid performance in key markets, including the GCC region, accounting for 39% of total Revenues, while continuously reinforcing revenue performance in Europe and North American outbound markets.”
