Their redesigned operating model focuses on improving operational efficiencies and cost optimisation, this has led to a 13% y-o-y decline in Selling expenses while General and Administrative Expenses (SG&A) costs declined by 1%.
Net Profit for Q1 2022 rose 3% y-o-y to AED 47m. Excluding the impact of write-offs from discontinued technologies, Normalized Net Profit for the period increased 14% y-o-y to AED 52m.
Aramex maintained a strong balance sheet position with debt-to-equity ratio of 46.8%, and a solid cash balance of AED 762m as at 31 March 2022, supporting Company’s active M&A pipeline.
In addition, the Courier Business Revenue fell 9% y-o-y to AED 911m driven by a slowdown in the cross-border business compared to the same period last year. This is attributed to an increased level in consumer travel which impacted demand for e-commerce. Meanwhile, Domestic Express Revenue held firm at AED 353mversus the same period a year ago.
Despite the softening in volumes, gross profit margin held steady compared with Q1 2021. According to Aramex, this was achieved by improving cost and operational efficiencies through automation of warehouses, implementation of AI solutions across the entire value chain, and scaling up presence in aims to improve the efficiency of last mile operations through the network of PUDO locations (pick-up/drop-off) as well as Aramex SPOT and Aramex FLEET.
Moreover, as part of the Aramex collaboration with DPD group, the Company became the 1st Express company in Morocco to be authorized to handle the Express business by road freight from France to Morocco.
Logistics & Freight-Forwarding revenues rose 28% y-o-y to AED 503mon the back of strong performance of the Freight business, as well as the steady pace of growth of the Logistics business.
Freight-Forwarding revenues surged 36% y-o-y to AED 391m in Q1 2022, predominantly driven by solid demand from SMEs and strong recovery in business activity in the oil & gas sector. The segment also benefitted from organizational restructuring including hiring more specialists.
Integrated Logistics & Supply Chain Solutions revenues witnessed a 7% increase to AED 112m in Q1 2022, on the back of strong retail activity, increased volumes from oil and gas clients, and increasing number of consumer businesses expanded their reach through e-commerce platforms.
Aramex’s Board of Directors have passed a resolution to increase the Foreign Ownership Limit to 100% from 49%, making it the first onshore UAE company listed on the Dubai Financial Market to allow for full ownership of its free-floating shares by foreign investors.
Aramex is a constituent of the FTSE Emerging Market Index and the MSCI Small Cap Emerging Market Index. The change in foreign ownership is expected to increase the stock’s available foreign room which would result in an increase of the stock’s weight in these indices, followed by an increase in passive money flows.