Aramex posted a 5 per cent drop in revenue and a 76 per cent drop in net profit in the third quarter, which the key logistics provider attributed to foreign exchange fluctuations and interest expenses on its acquisition of MyUS amid steep increase in interest rates globally.
While revenue fell to Dh1.35 billion during the third quarter of 2023, net profit for the period dropped to Dh9.642 million, it said on Wednesday, while attributing the decline in its revenue to currency fluctuations, macroeconomic challenges, and subdued global retail activity in certain markets.
Excluding the impact of foreign exchange translation, the decline in revenue was 2 per cent. More than half of the decline in net income can be attributed to the interest expenses related to the acquisition of US-based parcel forwarding company company MyUS, on account of steep increase in interest rates since the transaction, the company said.
Othman Aljeda, CEO of Aramex, said: “Our focus on cost optimisation has been pivotal in maintaining steady operating margins, even amid the challenges posed by currency fluctuations and the interest rate environment. The slight softening in revenue can be attributed to global headwinds, FX translations and reduced retail activities. However with the resilience of consumer spending in the GCC, the region continues to be a key driver of growth, reporting a 21 per cent growth in gross profit in Q3 2023.”
Normalised net income — excluding the foreign exchange impact and the increase in finance loan expenses — was Dh30.4 million in the third quarter, a decline of 23 per cent year-on-year. Core earnings or Ebitda stood at Dh134 million, a decline of 5 per cent year-on-year.
The GCC region remained Aramex’s mainstay, contributing nearly 40 per cent of the group’s total revenues. Aramex’s net debt-to-Ebitda ratio stood at 2.6x as on September 30, 2023, with cash balance at Dh604 million.