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Aramex, the world’s leading provider of integrated logistics and transport solutions, today reported revenue of AED2.97 billion ($808.6 million) in the first half of the year, down 1 percent from the same period last year.
Net profit fell 18% year-on-year to AED 91.9 million (US$ 25.02 million), mainly due to weaker revenue, also partly affected by exchange rates (ie Lebanese pound and Egyptian pound).
It said revenue in the second quarter of 2022 fell 3% year-on-year to AED 1.52 billion due to lower delivery volumes.
Second-quarter net profit fell 32% to AED44.6 million. Excluding the impact of discontinued technology and other one-off write-offs, normalized net profit for the first half of 2022 fell 13% year-on-year to AED 96.9 million.
At the group level, gross margin remained stable in the second quarter and six-month period, driven by accelerated growth in the logistics and freight forwarding business and improved efficiency in the express business.
The company said lower performance in express delivery was offset by solid growth in logistics and freight forwarding.
Year-to-date, the company has maintained a very healthy liquidity position with positive free cash flow, a cash balance of AED592 million and a debt-to-EBITDA ratio of 0.5 times (excluding IFRS 16). Aramex’s strong balance sheet will support the company’s growth strategy, including investments in digital and technology infrastructure and an aggressive M&A pipeline, it said.
During the reporting period, the company paid a dividend of AED 0.13 per share or AED 190.3 million for FY 2021 to shareholders in May 2022.
Othman Aljeda, CEO of Aramex, said: “One of the biggest changes we saw in our business in the first half of 2022 was a change in our revenue mix. Our freight forwarding and logistics business performed well, helping to offset our Weakness seen in the express business.
“The double-digit revenue growth in freight forwarding and growth in logistics is attributable to our strategic investments in expanding our business and market share, as well as enhancing our capabilities in that business. The organic growth to date has been driven primarily by industrial, Favored by high-growth industries such as SMEs, retail and pharmaceuticals.
“Our express business is facing industry headwinds. Despite this, we have been able to protect and maintain our gross margins,” he said.
Weakness in e-commerce activity is a global, industry-wide trend as consumers return to shopping in brick-and-mortar stores as Covid restrictions ease. “We’re also seeing a rise in global inflation, which puts downward pressure on discretionary spending,” he said.
“Going forward, our focus is on improving quality gains and increasing efficiency by optimizing resources and strengthening our end-to-end product and service offering in express, freight, logistics, warehousing and supply chain,” he said. -TradeArabia News Service
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