Aramex Reports Impressive Double-Digit Net Profit Growth Amidst Seasonal Challenges

Dubai, UAE – Thursday, 8 August 2024: Aramex PJSC (DFM: ARMX), a leading global provider of comprehensive logistics and transportation solutions, has announced its financial results for the second quarter (Q2) and first half (H1) ending 30 June 2024. The company has reported impressive double-digit net profit growth, reaffirming its stronghold in key markets.

Both International Express and Domestic Express segments achieved significant year-over-year (YoY) volume growth of 32% and 5% respectively. This expansion in customer base was coupled with maintaining good service levels in H1 2024. The Freight Forwarding division navigated a complex environment marked by increased rates and competition, achieving growth in volumes as it focuses on consolidating its position on key lanes. Additionally, the Logistics segment onboarded several new customers, effectively replacing legacy accounts.

Aramex achieved a robust 8% YoY increase in revenue for both H1 and Q2 2024, driven by revenue growth across all product lines. The revenue performance in the first half of the year is attributed to new customer wins and volume growth. The company maintained tight control over Group Selling, General, and Administrative Expenses (SG&A), with costs growing in line with revenue in H1 2024. Selling expenses increased in line with the company’s strategy to focus on sales specialism, while G&A were well managed, delivering a stable SG&A-to-revenue ratio of 20%, an improvement of 0.7 percentage points over H1 2023.

The first six months of the year saw a solid 5% YoY increase in Gross Profit, with a healthy Gross Profit Margin of 24% amid ongoing efficiency maximization and cost optimization efforts. Net profit showed a steady rise of 15% YoY in H1 2024, driven by a 20% growth in EBIT and an improved EBIT margin, indicating strong operational performance despite the impact of Q2 2024.

Looking ahead, Aramex is poised to sustain its growth momentum across key product lines in the second half of the year and is expected to deliver a good performance for the full year 2024 with an estimated growth of 8% to 9% in Group Revenues and an approximate Gross Profit Margin of 24% to 25%. The company will continue its strategic investments in infrastructure and talent to broaden its customer base and prioritize exceptional service, keeping it on course to meet year-end targets.

Aramex continues to be well-positioned with a cash position of AED 457 million and a Net Debt-to-EBITDA ratio of 0.9x (excluding IFRS16) as of 30 June 2024. Management’s focus on value creation has delivered a 40 basis points improvement in ROIC, currently standing at 5.2% for H1 2024.

In conclusion, Aramex's impressive performance in H1 2024, driven by strong revenue growth, effective cost management, and strategic investments, positions the company well for continued success. Investors should consider holding onto their shares as the company continues to navigate a complex environment and deliver robust financial results.