ZTO Express Reports First Quarter 2023 Financial Results

ZTO Express

ZTO Express, a leading express delivery company in China announced its first quarter 2023 results. Revenues were RMB8,983.2m (US$1,308.1m), an increase of 13.7% from RMB7,904.1m in the same quarter of 2022. Adjusted EBITDA was RMB3,133.0m (US$456.2m), an increase of 56.5% from RMB2,002.1m in the same quarter of 2022. Operationally, parcel volume was up 20.5%, from 6,297m parcels in Q1 2023, compared to 5,226m in Q1 of 2022. 

Express delivery services are the main revenue source for the company, but it is also active in freight forwarding and ‘sales of accessories’ and other activities. Express delivery services revenue amounted to RMB8,388.7m in Q1 2023, accounting for 93.4% of group revenue. Revenue from the core express delivery business increased by 16.1% compared to the same period of 2022, as a combined result of a 20.5% increase in parcel volume and a 3.7% decrease in parcel unit price.

Revenue from freight forwarding services decreased by 41.8% compared to the same period of 2022 primarily due to declined cross border e-commerce demand and pricing caused by weak global economy. Revenue from sales of accessories, largely consisted of sales of thermal paper used for digital waybills’ printing, increased by 30.8% in line with parcel volume growth. Other revenues were derived mainly from financing services.

Ms. Huiping Yan, Chief Financial Officer of ZTO, commented, “Our quarterly core express delivery ASP decreased 3.7%, or 5 cents year over year resulted mainly from lower average weight per parcel, decrease in KA volume where associated revenue includes delivery fees, and improved effectiveness of our network pricing policy. Unit cost decreased 12.8% or 14 cents because, aside from greater economies of scale, our process management initiatives started in the second half of 2022 continued to pay dividend. The standardization of operating procedures and measurement metrics helped to identify performance anomalies and address inefficiencies more timely and effectively. With a stable corporate cost structure, we grew our adjusted net income over 82% over last year, much faster than our top line increases.”