Aramex’s FY 2022 revenue of AED5.926 billion ($1.62 billion) was broadly in line with the 2021 figure of AED6.068 billion, while Q4 2022 revenue decreased 5% YoY to AED1.53 billion from AED1.61 billion.
Normalised net profit for the full year was up 9% YoY to AED173 million, owed in large part to the company’s efforts to drive operational efficiencies underpinned by expansionary GCC economies, increase in industrial activities in the region and resilient consumer spending. FY 2022 reported net profit declined 27% YoY to AED165.4 million, impacted by currency fluctuations in certain markets. For the Q4 2022 period, normalised net profit surged 42% compared to Q4 2021 to AED 45.3 million, while reported net profit declined 27% to AED33.9 million.
Financial results were normalised to give a like-for-like comparison to 2021; and therefore, they exclude performance of MyUS (acquired in Q4 2022), transaction costs related to the acquisition and other extraordinary items mostly related to the logistics product.
Growth in key regions including the GCC and other Menat countries was offset by weaknesses in other markets, impacted by lockdowns in China, overall slower economic growth and lower consumer confidence as well as the global inflationary environment. Revenue was also impacted by currency devaluation in some operating countries, primarily in Lebanon and Egypt, the company said.
For the full year 2022 period, normalised gross profit was down 2% YoY to AED1.41 billion, while reported gross profit was relatively unchanged from the prior period at AED1.42 billion. For the Q4 2022 period, normalised gross profit was up 6% to AED355 million, while reported gross profit was up 16% to AED381 million. The improvement in reported gross profit in the last three months of the year was primarily driven by the company’s disciplined cost management approach and operational enhancement initiatives, it said.
Aramex ended the year with a strong cash balance of AED768 million, which was stable compared to last year. It maintained a strong balance sheet with a debt-to-EBITDA ratio (excluding IFRS 16) of 2.2x, providing the company with considerable opportunity to deliver on its growth agenda.
Othman Aljeda, Chief Executive Officer, Aramex, said: “We ended the year as a stronger and more agile business with four well defined products and a clear growth strategy for the next five years. In 2022 we stabilized our gross profit margin for the group, as well as for our domestic and international express products; we grew our freight product by 27% while increasing its gross profit by 51%, and for our logistics product, we focused on quality revenue and reached 85% utilisation of our warehouses while increasing gross profit by 58%.
"This was supported by the solid growth in our home markets in the GCC and other Menat countries, which also contributed to a good performance in our main outbound markets including the US and UK. We now have a more diversified customer base than ever before, with no single customer making up more than 7% of our revenue, thus reducing our concentration risk. Important to note, we stabilised our group SG&A (selling, general and administrative expenses) in an inflationary environment which means that we have a leaner organisation which is more cost efficient, more agile and ready to sustain future growth under a similar and stable SG&A structure."
Commenting on the future outlook, Aljeda said: “We remain confident in the economic prospects of our home markets in the GCC and Menat, benefitting from good GDP projections, young populations and fantastic growth opportunities. We are looking forward to contributing to this growth by supporting trade across key lanes and delivering what matters most to our customers. 53% of our global revenue originates from these two regions. Accordingly, we are strengthening our sales teams with new hires in 2023."
"Looking ahead, our five-year business strategy provides us with a clear roadmap to grow our business and deliver long term value for all our stakeholders. We have earmarked AED2.4 billion in capital expenditure over the next five years to sustain our organic growth plans. We also have several M&A opportunities in the pipeline, as inorganic growth is a key component of our growth strategy. Our strong cash position will help us fund some of these acquisitions." -TradeArabia News Service
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