Aramex Achieves Robust Operating Margins Through Diversified Portfolio and
Home Market Resilience Amid Global Uncertainties
• Through persistent global challenges, inflationary environment and currency fluctuations,
Aramex delivered a robust Revenue of AED 1.35 billion in Q3 2023, a decline of 5% Year-on-Year
(YoY) and a resilient Gross Profit of AED 335 million, a growth of 4% YoY. Excluding the foreign
exchange translation impact, Revenue decline was 2% and Gross Profit growth was 8%.
• Aramex's strategically balanced geographical presence continues to be an advantage; the GCC
remains the highest contributor to Group revenues with a share of 40% of total revenues, with
the region also reporting 21% growth YoY in its Gross Profit in Q3 2023.
• The Company reported robust margin performance with Gross Profit margin increasing to 25%
and a stable EBITDA margin of 10%.
• EBITDA reached AED 134 million, a decline of 5% YoY in line with Revenue softness indicating the
continued focus on quality business, disciplined cost management and investment in operational
efficiencies.
• The Company's prioritization of cost management is also evidenced by the notable 9% decline in
the Group’s organic (excl MyUS) General, and Administrative Expenses (G&A) in Q3 2023.
Notably, selling expenses for the organic business increased during the quarter, in line with the
Company’s strategy to increase sales competencies in key verticals across key markets.
• Reported Net Income declined to AED 9.6 million for the Q3 2023 reporting period, largely led
by the steep increase in interest rates since the MyUS acquisition. Net income normalized for the
FX impact and the increase in finance expense loans following the acquisition of MyUS
transaction stood at AED 30.4 million in Q3 2023, a decline of 23% YoY.
• Aramex's International Express segment achieved steady growth, posting a 4% YoY increase in
revenue, despite the softness in volumes. The Domestic Express business was resilient both on a
YoY and sequential basis. Despite industry headwinds, our focus on Freight-Forwarding
delivered strong margins and for our logistics business, we continue to reposition it with increase
in quality revenue from strategic sectors.
Dubai, UAE – 8 November 2023: Aramex (DFM: ARMX), a global leader in comprehensive logistics and
transportation solutions, today released its financial results for the third quarter of the year ending
September 30, 2023.
Q 3 Q 3 % Change % Change
In Thousands of UAE Dirhams
2023 2022 (YoY) (YoY; excl
FX)
Revenues 1,349,678 1,426,250 (5%) (2%)
Gross Profit 334,657 320,827 4% 8%
Gross Profit Margin 25% 22%
EBIT 44,709 50,907 (12%)
EBIT Margin 3% 4%
EBITDA 133,866 141,357 (5%)
EBITDA Margin 10% 10%Net Profit 9,642 39,643 (76%)
Net Profit Margin 1% 3%
Normalized Net Profit* 30,420 39,643 (23%)
* Net income was normalized for the FX impact and the increase in finance expense loans in Q3 2023 compared to
Q3 2022, noting that the MyUS acquisition was closed in Q4 2022.
Financial Performance Commentary
In the third quarter of 2023, Aramex sustained its performance with Group revenues amounting to AED
1.35 billion. This represents a moderate 5% YoY decline, attributed to currency fluctuations,
macroeconomic challenges, and subdued global retail activity in certain markets. Notably, when
excluding the impact of foreign exchange (FX) translation, the decline in revenue was 2%.
The quarter bore testament to the Company's enduring resilience, as evidenced by a noteworthy 4%
YoY increase in Gross Profit and a resilient EBITDA of AED 134 million for the third quarter of 2023. This
progress was underpinned by the company's proactive measures to boost operational efficiencies and
optimize General and Administrative expenses (G&A) for the organic business (excluding MyUS). Our
prudent cost management resulted in strong margins in Q3, with a Gross Profit Margin of 25% and an
EBITDA margin of 10%.
Despite the increase in selling expenses, which aligned with our focus on sales specialism and enhancing
competencies, Aramex remained steadfast in its commitment to cost-efficiency. Notably, the third
quarter of 2023 showcased the Company’s ability in this regard, as evidenced by a noteworthy 9% YoY
reduction in organic (excluding MyUS) G&A expenses. This achievement signifies Aramex’s agility and
effectiveness in managing costs, effectively bringing organic G&A back to pre-pandemic levels.
The Company reported a Net Profit of AED 9.6 million in Q3 2023, a notable decline from AED 39.6
million recorded in Q3 2022. More than half of the decline in net income can be attributed to the interest
expenses related to the acquisition of MyUS due to the steep increase in interest rates since the
transaction. Therefore, normalized net income – excluding the FX impact and the increase in finance
loan expenses – was AED 30.4 million in Q3 2023, a decline of 23% YoY.
Aramex's strategically diversified geographical presence remains a key advantage, with the GCC region
consistently leading the way by contributing a remarkable 40% of the Group's total revenues.
Aramex maintained a strong balance sheet position with Net Debt-to-EBITDA ratio of 2.6x and a
healthy cash balance of AED 604 million as of September 30, 2023.
Othman Aljeda, Chief Executive Officer, Aramex, said: "In the face of an ongoing global growth
slowdown, Aramex remains steadfast in its commitment to a strategic framework centered on
operational efficiency, high-quality sales, and stringent cost management. Our focus on cost
optimization has been pivotal in maintaining steady operating margins, even amidst the challenges
posed by currency fluctuations and the interest rate environment.
‘’The slight softening in revenue can be attributed to global headwinds, FX translations and reduced
retail activities. However with the resilience of consumer spending in the GCC, the region continues to
be a key driver of growth, reporting a 21% YoY growth in Gross Profit in Q3 2023.
‘’As we continue to execute Q4, historically a stronger quarter marked by increased retail activity during
festivals, our primary focus will be to deliver outstanding services to our customers. We will continue
enhancing trade lanes, enriching the customer experience and fortifying our operational capabilitiesacross all business lines. Our goal is to expand our quality business lines, focusing on B2B, direct brands,
SMEs, and premium offerings such as same and next-day deliveries.”
Business Performance
International Express (Including Shop & Ship and MyUS)
Q3 Q3 % Change
In Thousands of UAE Dirhams
2023 2022 (YoY)
Revenues 511,951 493,927 4%
Gross Profit 182,510 151,839 20%
Gross Profit Margin 36% 31% 5%
International Express Shipment Volumes
Q3 Q3 % Change
In millions of shipments
2023 2022 (YoY)
Total Number of Shipments 4.9 5.1 (5%)
International Express Q3 Revenue grew by 4% YoY, reaching AED 512 million, despite the softening
of shipment volumes due to the slowdown in retail activity. Premium products (same day and next day
–intra GCC) and dangerous goods continue to perform well.
Reported Gross Profit for Q3 2023 reached AED 183 million, marking a 20% YoY increase and a solid
Gross Profit Margin of 36%. It is worth noting that the Express product costs had a positive impact
during Q3 2023 which we do not expect to recur in future quarters.
Several factors, including improvements in linehaul costs and other cost optimization measures, as well
as the consolidation with MyUS, continue to support the performance of the international express
product. Notably, the organic business (excl MyUS) also reported significant improvement - cost per
shipment was well managed, resulting in a 12% YoY increase in Gross Profit per shipment.
Domestic Express
Q3 Q3 % Change
In Thousands of UAE Dirhams
2023 2022 (YoY)
Revenues 352,597 369,820 (5%)
Gross Profit 72,164 88,902 (19%)
Gross Profit Margin 20% 24% (4%)
Domestic Express Shipment Volumes
Q3 Q3 % Change
In millions of shipments
2023 2022 (YoY)
Total Number of Shipments 24.5 24.4 0%
Domestic Express reported stable Revenue of AED 353 million in Q3 2023, representing a modest
decline of 5% YoY, due to marked currency fluctuations. Excluding the FX impact, revenue grew 4%.
Volumes were stable for the domestic express product. It is important to note, excluding Oceania,
where a turnaround plan is currently in progress, the domestic volume growth was 2% in Q3 2023
compared to the same period last year, driven by volume growth in GCC and MENAT.The lower Gross Profit margin is primarily attributed to the softness in Oceania, as well as a different
allocation of resources within the Group. Aramex’s automation and operational efficiency efforts have
pushed up courier productivity by 6%; Aramex’s Pick-Up and Drop-Off (PUDO) network increased by
65% this quarter compared to the same period last year.
Freight-Forwarding
Q3 Q3 % Change
In Thousands of UAE Dirhams
2023 2022 (YoY)
Revenues 367,911 439,530 (16%)
Gross Profit 58,314 60,782 (4%)
Gross Profit Margin 16% 14% 2%
Freight-Forwarding Shipment Volumes
Q3 Q3 % Change
2023 2022 (YoY)
Air Freight (KGs) 10,901,706 11,773,193 (7%)
Sea Freight (FCL TEU) 8,051 7,766 4%
Sea Freight (LCL CBM) 5,439 4,759 14%
Land Freight (FTL) 7,718 7,355 5%
Land Freight (LTL KGs) 53,409,441 38,523,420 39%
Aramex's Freight-Forwarding business continues to deliver quality business, with solid growth in
volumes and good profitability. Although a 4% YoY softening in Gross Profit was observed in Q3 2023,
this was predominantly influenced by the reduction in global shipping rates during that period which
impacted revenues.
The business has shown resilience through the economic cycles, as evidenced by the notable
improvement in the Gross Profit margin, which increased to 16%.
Logistics and Supply Chain Solutions
Q3 Q3 % Change
In Thousands of UAE Dirhams
2023 2022 (YoY)
Revenues 104,813 110,475 (5%)
Gross Profit 11,651 8,707 34%
Gross Profit Margin 11% 8% 3%
Logistics and Supply Chain Solutions Revenue witnessed a 5% decline YoY to AED 105 million in Q3
2023, primarily due to FX translations. However, when FX is factored out, Revenue grew 1% in Q3 2023.
The rebalancing of the logistics business continues, with increase in sales from strategic sectors such as
retail and energy. Sequentially, Q3 2023 saw a decline in sales and margins compared to Q2 2023 due
to loss of business, following the acquisition of our customer by a company already having Logistics
infrastructure. New business wins secured in Q3 2023 will be reflected in the financials in 2024.
- EndsAbout Aramex:
Aramex, established 40 years ago, has emerged as a global leader in logistics and transportation, renowned for its
innovative services tailored to businesses and consumers. As a listed company on the Dubai Financial Market (DFM)
and headquartered in the UAE, our strategic location facilitates extensive customer reach worldwide, bridging the
gap between East and West.
With operations in 600+ cities across 70+ countries, Aramex employs over 16,000 professionals. Our success is
attributed to four distinct business products that provide scalable, diversified, and end-to-end services for
customers. These products are:
• International Express, encompassing Aramex's Parcel Forwarding Business (Shop & Ship and MyUS).
• Domestic Express
• Freight Forwarding
• Logistics & Supply Chain Solutions
Sustainability is at the core of our vision and mission. To build a truly sustainable business, we leverage our core
competencies to make a positive impact as responsible members of the communities we serve. Through
partnerships with local and international organizations, we strive to expand our reach and benefit more individuals
through targeted programs and initiatives. To address environmental concerns and combat climate change, we
have committed to the Science Based Targets initiative (SBTi), renowned globally. This commitment propels us to
accelerate our climate action goals, aiming for Carbon-Neutrality by 2030 and Net-Zero emissions by 2050.
For more information, please visit us: www.aramex.com
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For more information, please contact:
Aramex
Anca Cighi
Investor Relations Director
Investorrelations@aramex.com
Edelman Smithfield
Shruti Choudhury Shraddha Sundar
Account Director Account Manager
M: +971 54 586 7874 M: +971 50 735 0608
E: Aramex@edelmansmithfield.com E: Aramex@edelmansmithfield.com

Sentiment: positive