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High inflation brings 49% net profit drop for Aramex

Aramex Aramex
Dubai courier firm Aramex has a healthy cash balance of AED722m as of March 31, 2023
  • Dubai courier firm revenue declines by 1%
  • Industry faces headwinds from cost inflation to base rate rises

Dubai-listed courier firm Aramex said net profit for Q1 2023 declined by 49 percent year-on-year to AED24 million ($6.54 million) due to currency devaluation in certain markets and global inflationary pressures.

Revenue declined marginally by 1 percent year-on-year to AED1.43 billion despite global headwinds. 

Gross profit improved 4 percent year-on-year to AED358 million in Q1 2023, driven by consolidated growth in the international express business and the MyUS acquisition providing a further boost.  

“Due to some negative FX and devaluation impact in some markets, Aramex moved swiftly to hedge exposures and move into more US dollar-denominated contracts,” the company said in a statement.

The courier firm maintained a strong balance sheet with a net debt-to-Ebitda ratio of 2.3x and a healthy cash balance of AED722 million as of March 31, 2023.

Othman Aljeda, CEO, Aramex, said: “In a quarter when our industry globally continued to face headwinds from cost inflation, base rate rises, softening shipment volumes and FX fluctuations, we presented a stable and resilient financial and business performance for the first three months of 2023.”

The continued growth in the GCC economies and the expectation that inflationary pressures around the world may peak and then decline significantly show some signs of optimism towards the end of the year, he added.

“We believe the key differentiator in the months ahead will be our ability to invest in technology, along with our geographic and business line diversification which offers a competitive advantage,” Aljeda said.