Logistics firm Aramex takes a dent on net profit in Q1-2023, cites slowing global shipment volumes
Revenues held up for logistics firm at Dh1.43b amidst tough operating conditions
Dubai: The Dubai-based logistics firm Aramex hit revenues of Dh1.43 billion for the first quarter 2023, down 1 per cent, brought on by a softening in global shipment volumes. Net profit though took a bigger dent, down 49 per cent to Dh23.9 million.
But a top Aramex official said the latest numbers still reflect resilience.
“In a quarter when our industry globally continued to face headwinds from cost inflation, base rate rises, softening shipment volumes and FX fluctuations, we are proud to present a stable and resilient financial and business performance,” said Othman Aljeda, CEO.
“Three of our four business lines increased gross profit year-on-year, and we maintained a stable profit margin in our domestic express business, due to our relentless focus on cost control and improvements in productivity.”
Hedging in dollars
The net profit decline stemmed from currency devaluation in certain markets, interest expenses associated with the MyUS acquisition, as well as the 'softening at top-line flowing through to the bottom-line'.
"Due to some negative FX and devaluation impact in some markets, the company made a quick move to hedge exposures and move into more US dollar-denominated contracts.
Looking to the GCC
"The continued growth in the GCC economies, and the expectation that inflationary pressures around the world may peak and then decline significantly show some signs of optimism towards the end of the year," said Aljeda. "We believe the key differentiator in the months ahead will be our ability to invest in technology, along with our geographic and business line diversification which offers competitive advantage."