Dubai: The UAE logistics company Aramex recorded a 4 per cent slip in 2023 revenues, totalling Dh5.69 billion from Dh5.92 billion a year ago, with its freight forwarding services dented by the fall in industry-wide rates.
This was capped to an extent by Aramex reporting higher growth on its international express delivery services, with cross-border ecommerce volumes playing their role.
That, however, was not enough to offset the 22 per cent decline in 2023 net profit, which came to Dh129.29 million from Dh165.37 million. The DFM-listed entity has in recent times been working on raising more efficiencies, on the operations side and on finances.
This is reflecting on the gross profit and margin, with the former up 2 per cent year-on-year in Q4-2023 to Dh389 million, driven by ‘consistent investment in efficiency maximizing initiatives and cost optimization’ and ‘continued focus on quality revenues’.
Aramex is pulling in its trucking fleet to help address local and regional side of things.
"With a large trucking fleet in the region, we are supporting our clients with alternative solutions," said Othman Aljeda, 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.:
An 'exceptional' Q4 helps
The gross profit margins improved one percentage point in both Q4-2023 and FY-2023, which is ‘in line with management expectations’. Numbers were aided by an ‘exceptional’ Q4-2023, marked by 'record quarterly international express volumes and improved profitability'. (In Q4-23, profit 'more than doubled'.)
Aramex, going forward, will be hoping to see more gains coming in from an expanding international network. “Our global operations are expanding, and we see opportunities across our key international markets,” said Othman Aljeda, CEO. “Regionally, the GCC and MENAT continued to account for half of our total group revenue and gross profit in Q4-2023.
“Despite mixed economic indicators across these markets, we achieved growth in gross profit of 6 per cent in the GCC and 32 per cent in MENAT.”
More than anything, “We are delivering on our strategy to optimize costs, improve operational efficiencies, and prioritize revenue quality in the face of cyclical pressures,” he added.
"While freight forwarding continues to pose challenges globally, we turn our attention to the situation at the Red Sea, where we are closely monitoring the current shipping disruption."
More to follow...
