Aramex Reports 2x Growth in Q4 2023 Group Net Income and Delivers the Highest-Ever Quarterly Volumes in International Express
· Amid challenging market conditions and currency fluctuations, Aramex improved profitability and margin performance, delivering a strong fourth quarter and a resilient full year performance in 2023.
· Revenue growth in International Express was offset by the decline in revenues from other products. Freight Forwarding was impacted by the decline in global rates in the Freight- Forwarding industry, while the Domestic Express and Logistics products reported marginal decline in revenues, impacted by currency translation.
· Gross Profit improved 2% YoY in Q4 2023 to AED 389 million, driven by Aramex’s consistent investment in efficiency maximizing initiatives and cost optimization as well as its continued focus on quality revenues. Notably, Gross Profit Margins improved one percentage point YoY in both Q4 2023 and FY 2023, in line with management expectations.
· Further reflecting the success in managing costs and operational efficiencies, EBITDA for Q4 2023 surged by 33% to AED 197 million and 2% YoY in FY 2023, despite the revenue softness. Aramex achieved a healthy EBITDA margin of 13% in Q4 2023, and 11% for the fiscal year.
Dubai, UAE – Thursday, 8 February 2024: Aramex (DFM: ARMX) a leading global provider of comprehensive logistics and transportation solutions, today announced its audited financial results for the Fourth Quarter (“Q4’’) and Full Year (“FY’’) ending 31 December 2023.
Aramex reported a marginal 1% YoY decline in Q4 2023 Revenue to AED 1.52 billion, despite challenging market conditions and currency fluctuations. Full Year Revenue was healthy at AED 5.69 billion, a decline of 4% YoY. When excluding the impact of currency translation, full year Revenue decline was 1% compared to reported decline of 4%.
Revenue growth in International Express was offset by the decline in revenues from other products. Freight Forwarding was impacted by the decline in global rates in the Freight- Forwarding industry, while the Domestic Express and Logistics businesses reported marginal decline in revenues, impacted by currency translation. Excluding the impact of currency translation, both products reported growth of 2% in revenue for the full year 2023.
With the management’s resolute focus on quality revenue, operational efficiency, and cost optimization, Aramex delivered a notable 2% YoY growth in Gross Profit for Q4 2023, reaching AED 389 million and remained stable for the full year. Gross Profit Margins witnessed a one percentage point improvement both in Q4 2023 and FY 2023, reaching 26% and 25%, respectively.
The Company’s fiscal discipline was further showcased through its improvement in Group Selling, General, and Administrative (SG&A) Expenses, returning to pre-pandemic levels for the cost structure. The organic business (excluding MyUS) delivered a 10% decline in general, and administrative expenses for the full year 2023. A 7% increase in selling expenses for the organic business for the full year 2023 reflects the Company’s strategy to increase sales competencies in key verticals across key markets to ensure sustainable and quality revenue growth in the future.
The substantial EBITDA growth of 33% YoY in Q4 2023 was driven by an increased focus on quality revenue, enhanced operational efficiencies and a one-time logistics business boost from settlement claims in the quarter. The EBITDA margin grew to 13% in Q4 2023, and reached 11% for the entire fiscal year.
Net Profit for Q4 2023 more than doubled to AED 77 million compared to the same period last year, driven by the growth in EBITDA. For the full year, Net Income witnessed a 22% decline to AED 129 million, attributed mainly to the increase in finance expenses associated with the MyUS acquisition loan taken in Q4 2022, and to a lesser extent, to the currency translation impact. Net income for the organic business increased 7% YoY in 2023 compared to 2022, demonstrating the underlying strength of our operations.
Aramex maintained a strong balance sheet position with Net Debt-to-EBITDA ratio of 2.4x and a healthy cash balance of AED 575 million as of 31 December 2023.
