UAE logistics firm Aramex hits 95% gain in Q1-2024 net profit as turnaround plan delivers
Q1-24 delivers upbeat numbers for Dubai firm - next up, pay down $50m-$70m in debt
Dubai: The DFM-listed logistics company Aramex delivered a near 100 per cent increase in net profit for the first quarter 2024, marking a strong return to growth ways. Net profit totalled Dh46.5 million, up from Dh23.9 million, which is a gain of 95 per cent year-on-year.
This was brought on by revenues of Dh1.5 billion, a gain of 8 per cent, and ‘with strong contributions from all product lines’. Its international express set up a sizeable part of the volumes handled, growing at 44 per cent. The domestic express and freight forwarding lines turned in a ‘resilient’ performance. “Logistics and supply chain solutions maintained a stable performance in Q1-2024, despite the challenges associated with currency devaluations in Egypt which negatively,” said a statement.
In the recent past, the Dubai headquartered Aramex had been working on expanding its higher margin services, analysts say, as the wider logistics industry saw some significant changes in a post-Covid environment. Ecommerce generated deliveries continue to help the logistics operator, while the business environment across GCC economies remains on an upswing, which too would help, analysts say.
Our focus remains on working towards our long-term ambition, which involves delivering quality service and enhancing our operational efficiency to meet the evolving needs of all our stakeholders.
Bring down debt
This year, Aramex will also focus on debt repayment of around $50 million to $70 million in a bid to ‘lower interest rate expenses in today’s high rate environment’.
“We will also maintain capex at similar levels to last year, to continue investments in critical projects such as warehouse expansion, automations and technology rollout,” said Othman Aljeda, CEO.
Focus on costs
According to Aljeda, “We anticipate Q2- and Q3-2024 to continue to deliver volume growth YoY, albeit at a softer rate compared to the levels seen during the peak seasons in Q1-2024 and in Q4-2023 due to seasonality.
“We will continue to manage our cost base and SG&A (selling, general and admin expenses) to ensure profitable growth. Our focus remains on working towards our long-term ambition, which involves delivering quality service and enhancing our operational efficiency to meet the evolving needs of all our stakeholders.”