Aramex has announced its financial results for the second quarter (“Q2”) and first half (“H1”) ending June 30, 2023.
Demonstrating resilience and remaining profitable in the face of weak market conditions including FX headwinds, Aramex reported Revenues of AED 2.8bn in H1 2023, a 5% decline YoY. 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.
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 optimization strategies, enabling the Company to navigate economic cycles with strength.
The Company’s prudent cost management was further evident as the consolidated Group Selling, General, and Administrative Expenses (SG&A) decreased by 3% YoY through the Q2 2023 period. Additionally, organic SG&A, which excludes MyUS, experienced a notable decline of 12% during the same quarter, showcasing Aramex’s agility in cost control.
Net Profit of AED 42.8m was reported in the first half of 2023, compared to AED 91.9m in H1 2022, with a similar decline of 57% for Q2 2023. 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, which is in line with Company’s strategy to leverage the balance sheet.
Aramex maintained a robust balance sheet position with Net Debt-to-EBITDA ratio of 2.6x and a healthy cash balance of AED 502m as of June 30, 2023.
Othman Aljeda, Chief Executive Officer of Aramex, said: “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. 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.”
Source: Aramex
