ZTO Reports Third Quarter 2024 Unaudited Financial Results

November 19, 2024

By Transport Intelligence

ZTO Express, an express delivery company in China announced its unaudited financial results for the third quarter ended September 30, 2024. The Company grew parcel volume by 15.9% year over year while maintaining high quality of service and customer satisfaction. Adjusted net income increased 2.0% to reach RMB2,387.3m. Cash generated from operating activities was RMB3,112.0m.

Third Quarter 2024 Financial Highlights

• Revenues were RMB10,675.0m (US$1,521.2m), an increase of 17.6% from RMB9,075.9m in the same period of 2023.
• Gross profit was RMB3,334.8m (US$475.2m), an increase of 23.2% from RMB2,706.4m in the same period of 2023.
• Net income was RMB2,379.0m (US$339.0m), an increase of 1.3% from RMB2,349.6m in the same period of 2023.
• Adjusted EBITDA was RMB3,739.5m (US$532.9m), an increase of 8.7% from RMB3,438.6m in the same period of 2023.
• Adjusted net income was RMB2,387.3m (US$340.2m), an increase of 2.0% from RMB2,340.7m in the same period of 2023.
• Basic and diluted net earnings per American depositary share (“ADS”) were RMB2.98 (US$0.42) and RMB2.90 (US$0.41), an increase of 2.4% and 2.1% from RMB2.91 and RMB2.84 in the same period of 2023, respectively.
• Adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders were RMB2.99 (US$0.43) and RMB2.91 (US$0.41), an increase of 3.5% and 2.8% from RMB2.89 and RMB2.83 in the same period of 2023, respectively.
• Net cash provided by operating activities was RMB3,112.0m (US$443.5m), compared with RMB2,938.1m in the same period of 2023.

Operational Highlights for Third Quarter 2024

• Parcel volume was 8,723m, an increase of 15.9% from 7,523m in the same period of 2023.
• Number of pickup/delivery outlets was over 31,000 as of September 30, 2024.
• Number of direct network partners was over 6,000 as of September 30, 2024.
• Number of self-owned line-haul vehicles was over 10,000 as of September 30, 2024.
• Out of the over 10,000 self-owned trucks, over 9,700 were high capacity 15 to 17-meter-long models as of September 30, 2024, compared to over 9,300 as of September 30, 2023.
• Number of line-haul routes between sorting hubs was over 3,900 as of September 30, 2024, compared to over 3,800 as of September 30, 2023.
• Number of sorting hubs was 95 as of September 30, 2024, among which 91 are operated by the Company and 4 by the Company’s network partners.

Mr. Meisong Lai, Founder, Chairman and Chief Executive Officer of ZTO, commented, “During the third quarter, ZTO maintained high quality of services and customer satisfaction, and achieved 8.72bn of parcel volume and 2.39bn of adjusted net income. Our retail volume increased by over 40% year over year for the quarter as we systematically improved cooperations with various ecommerce platforms for reverse logistics, remote area delivery and premium services. Our strategy to improve volume mix has generated very positive contributions to both revenue and operating margin.”

Mr. Lai added, “For nearly a decade since ZTO took the number one position in the industry, volume leadership has always been one of our key priorities. The recent stimulus policies by the central government sent a very strong signal for its commitment to support China’s economic recovery and long-term growth. In the meantime, the downgrade of consumer spending may still be present for a while before an economic turnaround takes place. Volume leadership is the cornerstone of our business. We are setting plans in motion to maintain high quality of services and customer satisfaction, to regain market share and widen our leadership in parcel volume while achieving a reasonable level of earnings.”

Ms. Huiping Yan, Chief Financial Officer of ZTO, commented, “ZTO’s core express ASP increased 1.8% for this quarter thanks to continued improvements in key accounts’ mix offsetting negative impact from lower per parcel weight and volume incentive increases. Combined unit sorting and transportation costs decreased 8.4%, or 6 cents benefiting from sustained productivity gain initiatives. SG&A as a percentage of revenue remained stable at approximately 5%. Cash flow from operating activities was 3.1bn, and capital spending was 1.8bn.”

Ms. Yan added, “The express delivery industry experienced high growth contrary to the soft macroeconomic conditions. We have guided down our annual volume targets based on the visibility we have for the year. The increasing proportion of low-value ecommerce packages presented new challenges to the execution of our overall strategy to achieve continuous and simultaneous growth or improvements in quality of services, volume market share and profit. We are making modifications to rebalance our resource allocation as well as key network pricing approaches to regain volume growth momentum and expand our existing market share lead. Our quality of earnings will remain intact, and we are confident in maintaining our leadership in profitability in the industry.”

Based on current market and operating conditions, the Company revises its previously stated annual guidance. Parcel volume for 2024 is expected to be in the range of 33.7bn to 33.9bn, representing a 11.6% to 12.3% increase year over year. Such estimates represent management’s current and preliminary view, which are subject to change.

 

Source: ZTO Express