Expolanka Holdings record steadfast performance for Q2 FY22

6 November, 2022

Expolanka Holdings PLC delivered resolute performance amid a challenging operating environment for the quarter ending September 30, 2022 with a revenue of Rs. 161.7 bn (YoY +7%), Gross Profit of Rs. 28.3 bn (YoY +25%) and profit after tax of Rs. 9.0 bn (YoY – 25%). This resulted in the company delivering a YTD revenue of Rs. 396 bn (YoY +61%) and Profit after Tax of Rs. 29.2 bn (YoY +59%). 

During the quarter, the Company focused on maintaining performance stability while building infrastructure and capabilities for future growth. 

Earnings from international operations continued to remain above 95% as Expolanka Group consolidated its performance during the quarter.

With these results, the company was able to generate an EPS for the quarter of Rs. 4.63.

Global markets remained disrupted during the quarter resulting in a slowdown. Whilst the pandemic-led demand surge has subdued, pressure on capacity has gradually eased, resulting in reduced freight rates. 

The logistics sector navigated through these challenges as the business delivered a Revenue of Rs. 159.3 bn (YoY +6%), Gross Profit of Rs. 27.6 bn (YoY +23%) and Profit after Tax of Rs. 8.5 bn (YoY -30%) for the quarter under review. The above resulted in the sector delivering a YTD Profit after Tax of Rs. 27.3 bn, returning growth of 45% YoY.

Soft demand conditions have resulted in Air Freight volumes tailing off during the quarter. However, intense sales efforts supported by solid service capabilities enabled EFL to mitigate these impacts. The quarter under review saw Air Freight rates softening gradually, resulting in yield moderation.

The Company has consolidated progress on the ocean freight product by focusing on increased customer penetration, developing partner networks and enhanced competencies. Although volumes have lowered during the quarter, it has occurred at a relatively reduced pace. Ocean rates remain tempered during the quarter with corrections in yields.

The North American trade lane remained the critical business driver; the European and Intra-Asia companies remained resilient with stable growth during the quarter.

EFL continues to make inroads into domestic logistics services in its core markets as the business complements its value offering to its customers by enhancing capabilities in all core markets.

EFL expanded its network to four new markets, establishing operations in the UK, with the intention to consolidate its European operations and growing its footprint in Central America by opening offices in the Dominican Republic, Costa Rica and Mexico. 

The leisure sector delivered an enhanced performance during the quarter. The results underscore the success of the strategies adopted by the Company in re-organising its portfolio. Adopting a lean and efficient operating model focused on digitalisation of the operational processes enabled the business to further strengthen its position as a premier travel brand in Sri Lanka. 

Whilst gaining market share, the leisure sector focused on efficient procurement and operational excellence to deliver a Revenue of Rs. 811Mn (YoY +233%), Gross profit of Rs. 545Mn (YoY +319%) and Profit after tax of Rs. 243Mn (YoY +2,026%), surpassing the previous quarter’s performance.

The Investment Sector remained steady, recording a revenue of Rs. 1.7 bn (YoY +85%) and a Profit after Tax of Rs. 295Mn (YoY +425%), with the main contribution coming from the export operation. The portfolio strategy of moving into high-margin products with less volatility drives the sector’s growth.

The IT business too, is gaining ground with improved contributions to the Group’s overall performance.

Increasing emphasis on working capital management and cash conversion, Expolanka was able to improve cash from operations to Rs. 110 bn, settling Rs. 67 bn in debt and reducing its gearing ratio to 27%.

– Sunday Observer Sri Lanka

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