Aramex earnings plunge 57% in Q2 on softening volumes

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The net profit of Dubai-based courier company Aramex fell to AED18.96 million ($5.16 million) in the second quarter of 2023, down 57 percent compared to AED44.56 million in the same period last year.

Revenue slipped on a global industry trend of softening volumes, declining eight percent year on year to AED1.39 billion. This was partly due to the impact of currency exchange differences, Aramex said in a statement to the Dubai Financial Market.

The company stated that Q2 2023 had fewer working days, mainly due to the shift of Islamic public holidays observed in certain markets during the quarter year on year.

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Aramex maintained a robust gross profit margin of 25 percent for both the half-year and second-quarter periods, despite a three percent and nine percent year-on-year reduction in gross profit for the first half and three-month period ending June 30, respectively. 

“Consistent investments in efficiency-maximising initiatives and cost optimisation strategies helped navigate economic cycles with strength,” the company said.

Net profit fell 53 percent to AED42.8 million in the first half of 2023, compared to AED91.9 million in H1 2022, due to a trickle-down impact from topline softening and an increase in finance expenses associated with the acquisition of MyUS, a cross-border e-commerce provider.

Aramex in October 2022 received the necessary regulatory approvals to complete the acquisition of MyUS for an all-cash purchase price of $265 million.

Revenue was up five percent year on year to AED2.82 billion in the first half.

Aramex CEO Othman Aljeda said: “We performed robustly in H1 2023, despite continued challenges in an environment characterised by cost inflation, lower freight rates, softening shipment volumes and FX fluctuations.” 

He added that the company’s focus in the second half of the year will remain firmly on cost reduction and improving efficiencies on operating expenses and selling, general, and administrative expenses.