Aramex sees stable H1 revenue as regional push offsets profit pressures

08/08/2025 03:00 AST

Aramex reported group revenues of Dh3.06 billion for the first half of 2025, marking a 1% year-on-year increase, as growth in domestic and regional logistics offset weakness in international express services.

The Dubai-based multinational logistics, courier and package delivery company said its financial results reflect ongoing strategic realignment amid broader industry shifts toward supply chain localization and nearshoring.

Profitability impact
EBIT dropped 45% year-on-year to Dh77 million in H1 2025, driven by lower gross profit and Dh26 million in one-off expenses related to the ADQ acquisition, regional restructuring, and the Accelerate28 transformation program.

Net profit for the half stood at Dh8 million, while Q2 recorded a net loss of Dh9 million.

On a normalized basis-excluding one-off costs-H1 EBIT was Dh95 million and net profit was Dh33 million, reflecting year-on-year declines of 32% and 34%, respectively.

Cost management efforts
Group SG&A expenses rose 3% YoY in Q2, accounting for 21% of revenue. However, excluding transformation-related one-offs, normalized SG&A fell 2%, reflecting effective overhead controls.

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Aramex continues to execute its Accelerate28 strategy, aimed at strengthening regional operations and improving efficiency. The company's new four-region structure and ongoing investment in data-driven decision-making and customer-centric innovation are central to this effort.

Nicolas Sibuet, Acting Group CEO, said: "Our H1 2025 results reflect consistent execution and a clear alignment with shifting customer needs. While we face margin pressures and a changing product mix, we have taken decisive actions through our Accelerate28 strategy to realign our operations and lay the groundwork for sustainable, long-term value creation."

Regional growth trends
The company noted rising demand for local and regional logistics solutions, driven by brands prioritizing proximity to consumers. This trend has led to a transition in shipment flows from extended international routes to regional and domestic channels, a shift that Aramex is actively capitalizing on across its core segments.

Aramex reported double-digit growth in the GCC and single-digit gains in Asia Pacific for both revenue and gross profit, offsetting softer performance elsewhere.

Market activity was impacted by geopolitical tensions, oil price fluctuations, and fewer working days in Q2 due to extended Eid holidays.

Despite solid volume performance in domestic and freight forwarding, the decline in high-margin International Express revenue altered the Group's product mix and impacted profitability.

Outlook
Aramex acknowledged ongoing margin recalibration and near-term pressure from the evolving product mix. However, it remains focused on strategic execution and long-term value creation, supported by a solid balance sheet.

As of 30 June 2025, the company held Dh542 million in cash and maintained a Debt-to-EBITDA ratio of 3.4x, providing capacity to support ongoing investments under the Accelerate28 program.

On July 25, 2025, Aramex confirmed it had become a subsidiary of Abu Dhabi's ADQ, following regulatory approval of ADQ's 63% ownership stake via Q Logistics and Abu Dhabi Ports. The partnership is expected to support innovation, scale, and future growth opportunities.

Gulfnews