Expolanka Holdings records sustained growth in 1Q

• Revenue up 146% to Rs. 235.1 b
• Gross Profit up 156% to Rs. 36.9 b
• Profit after tax soars by 220% to Rs. 20.1 b
• Over 95% of Expolanka Holdings revenue comes from its international operations  

Expolanka Holdings PLC, on Friday reported impressive financial performance in the 1Q of FY23 maintaining its growth momentum over the last several years.

Backed by strong strategy execution and focus on fundamentals, Expolanka Holdings was able to post a Revenue of Rs. 235.1 billion (YoY +146%), a Gross Profit of 36.9 billion (YoY +156%) and a Profit after tax of Rs. 20.1 billion (YoY +220%) for the quarter.

Expolanka Holdings Group CEO Hanif Yusoof stated: “Our asset-light business model, international network, balance sheet strength, our unified approach to business and our strong leadership team makes Expolanka Holdings PLC a unique value proposition to all our stakeholders.”

Leasing listed entity Expolanka has interests in logistics, leisure and Investments with a global presence in 34 countries and over 70 cities.

The group continued to generate strong returns, delivering an ROE of 96.16% on a trailing 12 month (TTM) basis, reflecting the enhanced operating leverage and the efficient asset utilisation strategies adopted by the group.

The depreciation of the rupee resulted in an exchange gain of Rs. 6.9 billion, whilst increasing the Net Asset Value of the company by Rs. 25 billion for the quarter. This is further evidence of the Group’s business profile and its balance sheet which has been built over the last several years.

In spite of the global market conditions and traditional off peak demand patterns, the Logistics sector was able to exhibit the potential of its operations, with focused execution of strategy enabling the sector to deliver consistent growth during the quarter under review, resulting in a revenue of Rs. 233.0 billion (YoY+146%), a gross profit of Rs. 36.2 billion (YoY +154% YoY) and a PAT of Rs. 18.8 billion (YoY +183%). 

Further, Yusoof stated: “The multi-pronged approach to our business has been centred on generating volumes through customer centric approach, building capacity through sound procurement practices and supporting business through efficient operational excellence.” 

He further noted that the customer expansion strategy has been well thought out, resulting in the company servicing several leading brands across key industry verticals.

The Air Freight product saw volumes tailing off during the quarter, a result of lower demand witnessed across its key markets. Whereas the Ocean Freight product continued to gain traction and delivered satisfactory growth during the quarter under review. 

This steady growth is a result of the increased emphasis placed on this segment. A vibrant partner network, increased customer penetration, enhanced competencies helped the ocean freight product maintain its strong momentum.

Whilst focusing primarily on its international freight forwarding business, EFL has been able to enhance its capabilities across its domestic logistics portfolio in key locations particularly in the North America market.

The proactive procurement strategy implemented by the group built capacity and stabilised margins. Strengthening existing relationships and building on new carrier relationships took priority for the procurement function.

“Global market conditions remained volatile during the period under review. Consumer demand was tempered in our North America market, a result of potential Inflationary impacts, whilst the global energy crisis resulted in increased pressure on oil prices. 

“Extended lockdowns in China resulted in reduced supply and further intensified supply chain pressure. Correction in freight rates were visible across both Air and Ocean Freight as capacity returned to the market, albeit still at elevated levels,” Yusoof added.

The Leisure Sector delivered a strong performance for the quarter despite the challenges experienced in the local market. The results reflect the efforts undertaken by the business to reorganise its portfolio, adopting a lean and efficient operating model and leveraging its capabilities as the leading travel brand in Sri Lanka. 

The Sector delivered a Revenue of Rs. 727 million (YoY + 379%) and a Profit after Tax of Rs. 233 million (YoY +736%). Historically, this is the best performance by the sector, with the Corporate Travel portfolio driving the results.

The Investment Sector remained steadfast recording a revenue of Rs. 1.4 billion (YoY +100%) and a Profit after Tax of Rs. 17.3 billion (YoY +608%) with the main contribution from the export operations. 

The sector profits include group dividends of Rs. 16.0 billion. The portfolio strategy of moving into high-margin products with less volatility is driving the growth of the sector. The IT business, too, is gaining ground with improved contributions to the overall performance of the group.

Reflecting its holistic approach to business, Expolanka continued to place emphasis on Environmental, Social, and Governance initiatives (E.S.G), the Group has adopted several proactive practices which are aligned with its overall strategic objectives.

Given the uncertain market conditions, the macro environment is expected to evolve, particularly with changing consumer demand patterns, nimble supply chains and increased digitisation. As a company, Expo will remain committed to meeting these challenges whilst moving forward to take advantage of opportunities with the single focus of creating value for all its stakeholders.