Expolanka achieves strong growth in 1Q amidst challenging external environment

• After tax profit swells 494% to Rs. 1.7 b; revenue up 58% to Rs. 36.2 b as logistics business outshines other sectors 

Amidst an external environment that continues to remain challenging, Expolanka Holdings yesterday announced its noteworthy performance during the first quarter of the new financial year. 

In a statement, the company said it generated a revenue of Rs 36.2 billion for the quarter, an increase of 58% year-on-year (YoY), as a result of a strong logistics sector performance. It also posted a Gross Profit of Rs 6.2 billion and a Profit after Tax of Rs 1.7 billion, the latter a 494% increase YoY. Its core logistics business led the performance for the group, posting strong earnings whilst the leisure and investment sectors remained subdued during the reporting period.

Expolanka announced these results as most economies around the world, including cities in which it maintains offices and operations, continue to impose strict lockdown measures. Although overall volumes across all verticals were subdued due to low demand from regular operations, the group was successful in optimising opportunities to serve existing customers and bring in new business. 

The company first and foremost focused its attention on ensuring the safety of staff and continuity of business operations in the most efficient manner, said Group CEO Hanif Yusoof in a statement to shareholders. He added, “During this time we realised the need to adapt to the new normal of business and remain strong to ensure that our customers and business partners are serviced in the most efficient and effective manner. As a result of our agile business strategy and focus on core business, we were able to deliver impressive results during this quarter.”

As in previous years, the company’s core logistics business is the driver of its performance this quarter, generating a revenue of Rs 35.6 billion (64% increase YoY) while servicing a diversified portfolio of customers. Its core brand EFL tapped into new business opportunities providing solutions for Personal Protective Equipment (PPE) related shipments, which global manufacturers pivoted to producing during this time. The sector leveraged longstanding relationships with carrier partners and optimised the performance of its origins to ensure fast and efficient PPE delivery for clients. Furthermore, EFL developed its service offering to the tech and pharma businesses during the time. 

With various economies reopening in May, the company saw a gradual return of regular business operations as well, which augmented its overall performance. The US Trade Lane operations remained the most active while Intra Asia and Europe Trade Lanes remained stable, albeit at muted operational levels. In its statement, the company noted that the air freight market had an extraordinary uptick in rates during the period due to closed airports leading to fewer flights and reduced capacities. Relying on its capacity to meet additional working capital requirements, EFL overcame the challenge and secured higher yields across operations by adopting effective and dynamic procurement strategies in this heightened air freight market. 

Expolanka continues to optimise technology investments to derive optimum efficiency and enhance visibility, connectivity and integration with customers and business partners. In its statement to shareholders, the company committed to remaining agile in operations and response during this challenging time while ensuring operational stability.

The sector’s contract logistics business continued to impress during the quarter. The momentum in stability and growth that was achieved in previous years was maintained during the quarter under review as well.

The leisure sector was significantly impacted by the pandemic, recording a loss of Rs. 73 million for the quarter. To mitigate the impact of closed airports and a temporarily stagnant travel and leisure market, the sector implemented short term cost reduction measures and a robust restructuring program to enable leaner operations with a focus on the core corporate travel business. Due to these measures, the sector remains in a strong position in the market. Once travel restrictions ease out, the sector will continue to optimise overall operations with these strategies in place.

The investment sector remained stable during the quarter generating a revenue of Rs. 549 million. Although performance was muted with most international markets closed, the largest contribution was from export operations.