UAE logistics company Aramex has reported a 22% decline in net profit in 2023 to Dh129.29 million, compared to the Dh165.37 million it recorded in 2022.
The company has explained the drop as a result of the decline in global rates in the freight-forwarding industry, changes in currency translations, and the increased costs associated with the MyUS acquisition loan taken in Q4 2022.
The company recorded a 4% drop in revenues in 2023, totalling Dh5.69 billion from Dh5.92 billion in 2022. Net income for the organic business increased 7% year-on-year (YoY)
Aramex reported its highest-ever quarterly volumes in international express delivery services, mainly driven by cross-border e-commerce volumes.
Aramex also provided an update on how it sees the industry facing the shipping distributions created by the crisis in the Read Sea, which has forced major container lines to take a longer – and costlier – route via the Cape of Good Hope.
“With a large trucking fleet in the region, we are supporting our clients with alternative solutions,” said Othman Aljeda, Aramex CEO. “We are deploying our trucks via Dubai and via Dammam, Saudi Arabia, for the onwards journey of shipments arriving from Asia and via Port Said, Egypt for the onwards journey of shipments arriving from Europe”
The company achieved a 2% gross profit increase in Q4 of 2023 to Dh389 million, driven by “consistent investment in efficiency maximizing initiatives and cost optimisation” and “continued focus on quality revenues”.
Aramex also recorded substantial EBITDA growth of 33% year-on-year (YoY) in Q4 2023, driven by an increased focus on quality revenue, enhanced operational efficiencies and a one-time logistics business boost from settlement claims in the quarter.
“I am pleased to report a strong fourth quarter and a resilient financial year performance for Aramex in 2023, despite persistent challenges in the operating environment globally,” Aljeda said.
“We are seeing a good start to 2024, a year during which our strategic focus remains on securing quality revenue across our four products, further enhancing efficiencies through technology and operational investments, to continue improving overall Group profitability.”
Aramex closed the year with a net debt-to-EBITDA ratio of 2.4x and a cash balance of Dh575 million.