Expolanka Holdings ends FY23 focusing on consolidation strategy to deliver long term growth

Expolanka Holdings PLC has ended its financial year 2023 displaying resilience in the face of a challenging macro environment, while pursuing a strategy of consolidation paving the way for future growth.

For the fourth quarter, Expolanka achieved a Revenue of Rs. 55.1 billion, Gross Profit of Rs. 19.3 billion, and Operating Profit of Rs. 1.08 billion. However, the appreciation of the Sri Lankan rupee against the dollar caused the group to record an exchange loss of Rs. 2.4 billion during the quarter under review.

For the 12-month period ending 31 March 2023, the company delivered a strong financial performance, with Revenues of Rs. 546 billion and a Profit after Tax of Rs. 31 billion. Expolanka’s international business operations contributed 95% to the total group performance. The company also achieved an EPS of Rs. 15.88 per share and an ROE of 22.67% during the same period.

Navigating amidst a dynamic and uncertain environment the company’s logistics sector posted a Revenue of Rs. 52.9 billion, with a Gross Profit of Rs. 18.5 billion and an Operating Profit of Rs. 987 million for the quarter. These results contributed to the sectors overall Revenue of Rs. 537 billion and Profit after Tax of Rs. 29.4 billion for the financial year ended on 31 March 2023.

In a statement, Expolanka said a range of factors including key North American trade lanes experiencing a slowdown in global trade due to high inventory levels from pandemic-era overstocking, reduction in consumer spending and new orders from most retailers, geopolitical tensions, and increased energy costs affected the sector during the past year. However, the company believes that the slowdown is part of short-term cyclical changes following a strong economic performance in 2021.

Despite the challenges, the logistics sector remained focused on core business fundamentals with EFL Global onboarding new customers and increasing the wallet share reflecting the continuity and consistency of EFL’s long term strategy. Though the demand-supply imbalances continue to impact the industry, EFL Global has continued to expand its service capabilities in both origin and destination markets. Investments in the contract and domestic logistics business have also started to contribute positively both commercially and financially. The US market remained the key driver of business, while the European and Asian trade lanes performed satisfactorily.

In pursuit of future growth, EFL Global completed two large acquisitions valued at Rs. 35 billion, acquiring Trans American Customs broker and Locher Evers Inc. These acquisitions will expand EFL’s service portfolio and customer base and consolidate its North America operations. While both acquisitions will further strengthen the company’s position in the North American market facilitating growth, EFL also aims to continue to invest in infrastructure to facilitate growth and drive efficiencies.

The leisure sector yielded a strong Q4 performance delivering Revenue of Rs. 835 million and a Profit after Tax of Rs. 132 million. Annual revenues were a record-breaking Rs. 3 billion and a Profit after Tax of Rs. 811 million having focused on efficient procurement and operational excellence. The success of the company’s strategies in reorganising its portfolio and adopting a lean operating model was reflected in the results.

The Group’s investment sector posted Revenues of Rs. 1.6 billion for the quarter and ending the financial year with Revenues of Rs. 6.5 billion. Though the volatile global macro environment and uncertain market conditions have made visibility and predictability challenging, Expolanka, having demonstrated agility and adaptability in the past, will continue to focus on delivering strategic initiatives adjusting to market challenges. With EFL Global having established itself as a top freight forwarder, the company remains committed to building capabilities, infrastructure, and systems to create sustainable value for all stakeholders.