Expolanka Holdings posts Rs. 402 m NPAT in 2Q

Friday, 15 November 2013 00:00 - - {{hitsCtrl.values.hits}}

Expolanka Holdings PLC posted revenue of Rs. 14.9 billion for the second quarter in the financial year 2013/14 in comparison to Rs. 12.6 billion for the corresponding period in 2012/2013, resulting in an 18% growth. The group recorded a Net Profit after Tax (NPAT) of Rs. 402 million while the Net Profit attributable to the equity holders of the its parent reached Rs. 342 million in comparison to Rs. 289 million recorded during the corresponding period last year.

Expolanka Holdings PLC Group CEO Hanif Yusoof said: “The results of the second quarter of the financial year reflect a strong performance from new markets in the freight sector despite the slowdown in activity in the Indian subcontinent. This has enabled the group to record a profit growth despite volatile market conditions. Our focus is to concentrate on growth markets in freight and consolidate existing businesses in other sectors.” Positive results despite lower growth than expected The group’s core sector, freight and logistics, recorded a healthy revenue and profit growth in comparison to corresponding period last year. The increase in profit was driven by growth in trade volumes and revenue generated from new ventures in Hong Kong, China and USA. These new stations continue to provide positive results despite lower than expected growth from core markets. The travel and leisure sector recorded a significant growth in revenue at Rs. 1,313 million from Rs. 823 million recorded in the corresponding period last year. However, profits declined from Rs. 77 million to Rs. 61 million partially due to the cost escalation in the growing markets. Further challenges in margin management in a competitive outbound businesses depressed profits. Nonetheless this sector has been showing positive signs during the quarter under review where it has recorded Rs. 40 million profits in comparison to Rs. 21 million in the first quarter of the current financial year. Positive trading and manufacturing performance The group’s international trading and manufacturing sector revenue reached Rs. 8.3 billion from Rs. 6.0 billion recorded during the corresponding period last year. This was as a result of increased exports of perishables, tea and commodity products. The sector faced challenges in managing margins as a result of fluctuations in commodity prices. The sector profit for the first six month period came in flat at Rs. 86 million compared to Rs. 83 million for the corresponding period last year. “The decision to exit from Expolanka Commodities and Lanka Premier Foods, both having high volatility to earnings was a result of our strategic portfolio review. The divestment would enable the group to free up capital and reduce its exposure to high volatility in earnings in the sector. “This strategic move will enable us to focus on the core businesses. We will continue to take initiatives to improve group profitability and focus on consolidation of existing businesses to improve efficiency,” Yusoof added.