Aramex net profit slips 27% to Dh165.4 million in 2022

Aramex on Thursday said its annual net profit dropped 27 per cent to Dh165.4 million last year due to currency fluctuations in certain markets primarily in Lebanon and Egypt.

In a statement, the leading global provider of comprehensive logistics and transportation solutions said its 2022 revenue was broadly in line with the 2021, while Q4 2022 revenue decreased five per cent to Dh1.53 billion.

"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," according to the statement.

Aramex said its normalised net profit surged 42 per cent in fourth quarter of 2022 to Dh45.3 million while reported net profit declined 27 per cent to Dh33.9 million.

For the full year 2022 period, normalised gross profit was down two per cent to Dh1.41 billion while reported gross profit was relatively unchanged from the prior period at Dh1.42 billion. Normalised gross profit was up six per cent to Dh355 million in fourth quarter, while reported gross profit was up 16 per cent to Dh381 million.

"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,"the statement said.

Normalised net profit for the full year was up nine per cent to Dh173 million, 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 Dh768 million, which was stable compared to last year.

“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 stabilised our gross profit margin for the group, as well as for our domestic and international express products; we grew our freight product by 27 per cent while increasing its gross profit by 51 per cent, and for our logistics product, we focused on quality revenue and reached 85 per cent utilisation of our warehouses while increasing gross profit by 58 per cent," Othman Aljeda, chief executive officer, Aramex, said.

"We now have a more diversified customer base than ever before, with no single customer making up more than seven per cent of our revenue, thus reducing our concentration risk," he said.

Commenting on the future outlook, Othman Aljeda said: “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. About 53 per cent of our global revenue originates from these two regions. Accordingly, we are strengthening our sales teams with new hires in 2023."

"Looking ahead, our five-year business strategy provides us with a clear roadmap to grow our business and deliver long term value for all our stakeholders. We have earmarked Dh2.4 billion in capital expenditure over the next five years to sustain our organic growth plans. We also have several M&A opportunities in the pipeline, as inorganic growth is a key component of our growth strategy. Our strong cash position will help us fund some of these acquisitions," he said.

— business@khaleejtimes.com

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