Turning to financial performance, we have been impacted by the ongoing global challenges, inflation and currency fluctuations. Aramex delivered a robust revenue of AED 5.69 billion for the year. Excluding the impact of year-on-year currency fluctuations, our Group Revenue declined 1% compared to the reported decline of 4%.
Our home markets in the GCC and MENAT significantly contributed to the Group’s performance, accounting for half of the Group’s total revenues and gross profit.
Looking at our performance across our regions, we witnessed double digit growth in gross profit in the GCC during the year, and a stable performance in the MENAT region which was heavily impacted by FX. Our outbound markets including Europe and United Kingdom grappled with subdued consumer sentiment and rising inflationary pressures which impacted e-tailers and other businesses. In South Asia we saw growth in gross profit, while in Oceania, we continued our restructuring plan and this market contributed with approximately 40% of the volume of our global domestic express product. In the US we doubled our gross profit, on the back of the MyUS acquisition.
The management team prioritized quality revenue growth, operational efficiency and cost optimization through the economic cycle delivering a healthy and stable Gross Profit of AED 1.43 billion for the full year 2023 and a strong gross profit margin of 25%, representing a growth of one percentage point over 2022.
We adopted a prudent cost management strategy to help us navigate the financial challenges of 2023 characterized by currency fluctuations and rising inflation. For our organic business (excluding MyUS), we delivered a 10% decline in general, and administrative expenses. As for our selling expenses for the organic business, the 7% increase aligns with our strategy to increase sales competencies in key verticals across key markets to ensure sustainable and quality revenue growth in the future.
Our focus on quality business, and increased investments in operational efficiency and technology further drove cost efficiencies across the board. Group EBITDA increased 2% to AED 628 million, despite the decline of 4% in Revenues, while the EBITDA margin also improved to 11% for the full year 2023.
Net Profit for the year was AED 129 million, a decline of 22% driven by the increase in interest rate expenses associated with the MyUS acquisition loan taken in Q4 2022. The organic business improved net income by 7% for the year 2023 compared to the year 2022. Throughout the year, we continued to pursue further diversification within current verticals including retail, energy, e-commerce, healthcare and industrial. Our ability to deliver tailored solutions coupled with a strong and diverse portfolio of customers across specialized industries has been key to strengthening our position across our markets. At the end of 2023, our biggest customer accounted for 6% of total Group Revenues.
A dynamic macro-economic environment
The global economy experienced a slower growth rate in 2023, marked by higher interest rates and inflation. Nevertheless, the year ended with modest expansions seen in the US and UK, while growth across the non-oil sector in the GCC remained remarkably firm. Across our home markets, government investments linked to various economic diversification agendas taking place across the region are expected to remain a primary driver of economic activity. In turn, this can translate to an uplift in consumer sentiment and increased spending. The UAE and KSA specifically boast fast-growing ecommerce industries, supported by tech savvy consumers with a preference for online shopping. We also see development of enhanced logistics infrastructure across the region, better connectivity with global gateways, and most importantly economic reforms spurring trade and economic diversification.
Economic developments coupled with the GCC’s growing importance as both a market and a trade hub continue to offer growth opportunities for expanding into new verticals. We are focused on developing our healthcare, SMEs, and specialized solutions, while continuing to grow our key verticals across e-commerce, retail and industrials.
Building Blocks of Excellence
For over 40 years, dedication, proactiveness, and agility have been the cornerstones of Aramex’s success. Our journey is shaped by our commitment to our shareholders, employees, partners, and customers. As a people-centric business, we understand the significance of building for the future and to that end our focus remains on investing in technology, sustainable operations and of course the development of our people.
Technology & Innovation
Our investments in technology improve operational efficiency and our customer experience. In 2023 we made good progress in redefining the customer journey from route optimization and quicker deliveries to increased transparency and connectivity. To that end, from groundbreaking AI products to comprehensive training programs, we’re empowering our employees to harness the power of technology to improve the way we move goods.
We rolled out Google routing optimization and live tracking in the GCC for last-mile efficiency; and optimized our Gateways and Hubs performance through the launch of the Global Customs tracking and cross-border compliance system. These initiatives offer customers superior experiences with greater transparency supported with real-time, in-depth tracking. In October 2023, Aramex unveiled its largest automation system to date in Sydney, Australia. This multi-million-dollar investment streamlines operations and increases daily capacity, but also unlocks faster delivery times and enhances service levels. This complements our ongoing automation roadmap covering projects across Singapore, Saudi Arabia, Oman, Qatar, and other markets.
Additionally, we introduced our in-house developed Warehouse Management System (WMS), which has streamlined our e-commerce operations. We also concluded the roll out of our cloud-based warehouse management system which is used globally in all our warehouse facilities, enabling the delivery of enhanced data analytics for customers.
Delivering Good
We stand committed to the Science Based Target initiative (SBTi) to reduce our greenhouse gas emissions as part of our sustainability strategy and to ensure that our progress towards net-zero carbon is aligned with climate science.
Aramex has developed a promising pipeline of projects to reduce its emissions, focused primarily on Scope 1 and 2. These projects will build on existing efforts, driving increased EV adoption across our fleet as well as expanding our solar energy capabilities across our warehouses and facilities. Last mile efficiency remains a key priority and is driven by technology investments and data analytics that provide us with greater visibility for decision-making. We are seeing increased demand from our customers for sustainable operations, and we are glad to be able to contribute to their sustainability goals.
In keeping with our “Delivering Good” strategy, during 2023 we continued to promote youth empowerment and education through various community initiatives in some of our key markets. We also provided emergency relief, extending our support for earthquake affected areas in Turkey, Syria and Morocco and war struck Gaza through employee matching campaigns. Further detail on these activities is provided in the Sustainability section of this report.
Empowering Excellence
Emphasizing Diversity, Equality, and Inclusion (DEI), our workforce includes over 104 nationalities and is a cornerstone of our strength. In 2023, we conducted a comprehensive Global Policy review, externally benchmarking our policies to align with industry best practices worldwide. In line with our commitment to nationalization targets, we successfully achieved set goals in the UAE and KSA, reflecting our dedication to creating an integrated and representative workforce.
We are actively working to enhance gender balance, introducing targeted development programs such as the ‘Stand-out Development Path for Women’ and ‘Embracing Equity’ learning path in 2023. As one of the first 50 companies in the UAE pledging with the Gender Balance Council, we aim to reach 30% women’s representation in mid and senior positions by 2025. With 22% female representation on our Board of Directors, our efforts toward women’s empowerment and gender balance continue.
Our Way Forward
Whilst we remain committed to expanding our operations globally, we take pride in being a regional champion across the GCC and MENAT. Thus, when accounting for that notable contribution and for the region’s projected economic growth, we reiterate our commitment to furthering our investments across the region and our ambition to maintain a leading position in the region.
Elsewhere across our global operations, we see good growth opportunities in South Asia and in Africa; we expect to start seeing the results of the turnaround strategy in Australia; and we are excited to chart new routes across Asia, India Subcontinent, GCC and East Africa through our joint venture with our shareholder AD Ports which will become operational in 2024. For our international express operations in the US, we will move our Shop’n’Ship origins from JFK, New York, to Sarasota, Florida to further consolidate our operations with MyUS and drive more efficiencies.
Looking ahead to 2024 we will continue to address market changes and emerging industry trends through investing further in technologies, capabilities, and systems. This will allow for greater agility across our infrastructure and operations, and improved customer experiences. IwouldliketothankouresteemedBoardofDirectorsfortheirongoingsupportandguidance; and thank our shareholders for their trust in the Aramex brand. I would also like to thank my team, all Aramexians, for their valuable contributions to the business, and to our partners and customers for their support.
Sincerely yours,
Othman Aljeda Group CEO,
Aramex PJSC,