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Thursday, March 23, 2023

Aramex sees normalized net profit growth of 9% in 2022

Aramex sees normalized net profit growth of 9% in 2022

Aramex’s fiscal 2022 revenue of AED 5.926 billion (US$ 1.62 billion) was virtually unchanged from AED 6.068 billion in 2021, while revenue in the fourth quarter of 2022 was down 5% year-on-year from AED 1.61 billion. to AED 1.53 billion.

Full-year normalized net profit rose 9% year-on-year to AED 173 million, thanks in large part to the company’s efforts to improve on the back of expanding GCC economies, increased industrial activity in the region and resilient consumer spending. Operational efficiency. Reported net profit for FY2022 fell 27% year-on-year to AED 165.4 million due to currency fluctuations in certain markets. For Q4 2022, normalized net profit increased by 42% compared to Q4 2021 to AED 45.3 million, while reported net profit fell 27% to AED 33.9 million.

Financial results have been normalized for comparison to 2021; therefore, they exclude the results of MyUS (acquired in Q4 2022), transaction costs related to the acquisition and other special items primarily related to logistics products.

Growth in key regions, including the GCC and other Menat countries, was offset by weakness in other markets impacted by China’s lockdown, slower overall economic growth and lower consumer confidence, and a global inflationary environment. The company said revenue was also impacted by the depreciation of the currencies of some of the countries in which it operates, mainly Lebanon and Egypt.

For the full year 2022, normalized gross profit fell 2% year-on-year to AED 1.41 billion, while reported gross profit was essentially flat compared to the previous period at AED 1.42 billion. Normalized gross profit rose 6% to AED 355 million in Q4 2022, while reported gross profit increased 16% to AED 381 million. It said the improvement in gross profit reported in the last three months of the year was mainly driven by the company’s disciplined cost management approach and operational enhancement programme.

Aramex ended the year with a cash balance of AED 768 million, stable compared to the previous year. It maintains a strong balance sheet with a debt-to-EBITDA ratio (excluding IFRS 16) of 2.2 times, providing the company with substantial opportunities to achieve its growth agenda.

Othman Aljeda, CEO of Aramex, said: “We end 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 the Group’s gross margin, and gross margins for domestic and international express products; our freight products grew 27% and gross profit increased 51%; %.

“This is supported by solid growth in our domestic market in the GCC and other Menat countries, which also contributes to our good performance in our key outbound markets including the US and UK. We now have more Diversified client base, with no single client accounting for more than 7% of our revenue, thereby reducing our concentration risk. It is important to note that we have stabilized our group’s SG&A (Sales, General and Administrative expenses), which means we have a leaner organization under a similar and stable SG&A structure that is more cost-effective, flexible and poised to sustain future growth.”

Commenting on the future outlook, Aljeda said: “We are confident in the economic prospects of the GCC and Menat home markets, benefitting from favorable GDP forecasts, young populations and excellent growth opportunities. We look forward to supporting trade across key corridors Contributing to this growth is providing our customers with the most important services. 53% of our global revenue comes from these two regions. Therefore, we will recruit new employees in 2023 to strengthen our sales team.”

“Looking ahead, our five-year business strategy provides us with a clear roadmap to grow our business and create long-term value for all stakeholders. We have earmarked AED 2.4 billion in capital expenditure over the next five years to maintain our organic growth” plan. We also have several M&A opportunities as inorganic growth is a key component of our growth strategy. Our strong cash position will help us fund some of these acquisitions. “-trade arab news agency

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