Aramex Announces Strong Growth in Q4 2023


Aramex has announced its audited financial results for the Fourth Quarter (“Q4’’) and Full Year (“FY’’) ending December 31, 2023.

Aramex reported a marginal 1% YoY decline in Q4 2023 Revenue to AED 1.52b ($414m), despite challenging market conditions and currency fluctuations. Full Year Revenue was healthy at AED 5.69b ($1.55b), a decline of 4% YoY. When excluding the impact of currency translation, full year Revenue decline was 1% compared to reported decline of 4%.

Revenue growth in International Express was offset by the decline in revenues from other products. Freight Forwarding was impacted by the decline in global rates in the Freight-Forwarding industry, while the Domestic Express and Logistics businesses reported marginal decline in revenues, impacted by currency translation. Excluding the impact of currency translation, both products reported growth of 2% in revenue for the full year 2023.

With the management’s resolute focus on quality revenue, operational efficiency, and cost optimization, Aramex delivered a notable 2% YoY growth in Gross Profit for Q4 2023, reaching AED 389m ($106m) and remained stable for the full year. Gross Profit Margins witnessed a one percentage point improvement both in Q4 2023 and FY 2023, reaching 26% and 25%, respectively.

The Company’s fiscal discipline was further showcased through its improvement in Group Selling, General, and Administrative (SG&A) Expenses, returning to pre-pandemic levels for the cost structure. The organic business (excluding MyUS) delivered a 10% decline in general, and administrative expenses for the full year 2023. A 7% increase in selling expenses for the organic business for the full year 2023 reflects the Company’s strategy to increase sales competencies in key verticals across key markets to ensure sustainable and quality revenue growth in the future.  

The substantial EBITDA growth of 33% YoY in Q4 2023 was driven by an increased focus on quality revenue, enhanced operational efficiencies and a one-time logistics business boost from settlement claims in the quarter. The EBITDA margin grew to 13% in Q4 2023, and reached 11% for the entire fiscal year.

Net Profit for Q4 2023 more than doubled to AED 77m ($21m) compared to the same period last year, driven by the growth in EBITDA. For the full year, Net Income witnessed a 22% decline to AED 129m ($35m), attributed mainly to the increase in finance expenses associated with the MyUS acquisition loan taken in Q4 2022, and to a lesser extent, to the currency translation impact. Net income for the organic business increased 7% YoY in 2023 compared to 2022, demonstrating the underlying strength of our operations.  

Aramex maintained a strong balance sheet position with Net Debt-to-EBITDA ratio of 2.4x and a healthy cash balance of AED 575m ($157m) as of December 31, 2023.

Othman Aljeda, Chief Executive Officer, Aramex, said: “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. Q4 2023 has proven to be exceptional, marked by record quarterly International Express volumes and improved profitability for the Group. This is driven by client wins, operational excellence, and the strength of our home markets in the GCC and wider MENAT region.

We are delivering on our strategy to optimize costs, improve operational efficiencies, and prioritize revenue quality in the face of cyclical pressures. Our EBITDA increased 33%, while our net profit more than doubled in Q4 2023 compared to the same period last year. Our organic net income for the full year also improved, registering a 7% growth compared to 2022.

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% in the GCC and 32% in MENAT. Our global operations are expanding, and we see opportunities across our key international markets.

International express benefitted from new client wins, with significant growth in volumes and healthy improvement in profitability. Domestic Express maintained stable volumes despite a challenging operating environment. The Logistics product enhanced efficiencies, and is supported by a robust pipeline of client wins for 2024. 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. With a large trucking fleet in the region, we are supporting our clients with alternative solutions. We are deploying our trucks via Dubai, United Arab Emirates 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.

Operationally, during Q4 2023 we successfully completed our most extensive automation project to date at our Sydney facility, which will improve productivity and efficiency in Australia. Additionally, other automation projects were successfully concluded in other markets, further fortifying our network capabilities.

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.”

Source: Aramex