Expolanka reports Rs. 103 b in revenue for FY20; records growth despite challenging last quarter

A consistent performance coupled with a focus on its core operations has enabled Expolanka Holdings PLC to post a consolidated annual revenue Rs. 103 billion for the financial year ending 31 March 2020. This is the highest ever revenue recorded by the Group (up by 8% YOY). The above was propelled by a 5% YOY growth in its quarterly revenue of Rs. 23.3 billion. 

The quarter began with supply chain disruptions (including factory closures) in China, which slowed down production, and continued with other international markets going into lockdown during the latter part of Q4. 

Despite the above, the Group sustained momentum to generate a quarterly Gross Profit of Rs. 4.5 billion (+2% YoY), delivering an Annual Gross Profit of Rs. 19.1 billion (+6% YOY). 

Exclusive of a one-time legal settlement during the year, Expolanka posted a Profit after Tax of Rs. 1 billion. However, the legal settlement in September 2019 at $ 6.75 million impaired the impact of earnings on profit. These circumstances resulted in a loss of Rs. 438 million for the year (Profit after Tax YTD). 

The Group continued to remain strong and exceptionally resilient in its Logistics operation, despite an evolving and volatile environment. A consistent focus on optimising services to customers coupled with expanding the customer portfolio enabled the logistics sector to generate a Rs. 22.7 billion (+6% YoY) revenue for the quarter, resulting in the sector generating an annual revenue of Rs. 98.6 billion (+9% YoY).

Furthermore, the sector continued to take progressive and proactive procurement strategies enabling the sector to stabilise its margins and generate a Gross Profit of Rs. 4.2 billion (+5% YoY) which enabled the sector to conclude the year with an annual gross profit of Rs. 17.8 billion (+7% YoY). 

Whilst Air Freight operations remained stable, Ocean Freight operations performed commendably well during the year. The North American trade lane which faced several challenges during the first half of the year, experienced an improved performance particularly during the last quarter of the year. The European and Intra Asia trade lanes saw a slight drop in performance during the year. The Warehouse and Transport segments also performed well, which was consistent with last year’s performance. Furthermore, the company also expanded its Europe operations by establishing a new company in Denmark and making an acquisition in Belgium. The ERP (Enterprise Resource Planning) platform’s global deployment across the organisation is almost complete, with the team now concentrating on driving efficiencies.

The Leisure sector delivered a revenue of Rs. 270 million for the last quarter and Rs. 1.2 billion for the year, despite significantly depressed market conditions. Although the quarter started reasonably, travel restrictions began emerging in many parts of the world from February. The closure of airports and Sri Lanka’s own lockdown in March meant that corporate travel and leisure business came to almost a standstill during the period. Overall, the sector was also impacted by the unfortunate incidents of April 2019 and was still on the recovery path when it was once again struck by travel restrictions. Although the Leisure sector recorded a loss of Rs. 28 million for the quarter, it still generated a yearly Profit after Tax of Rs. 110 million indicating strong and consistent performance by the sector. 

Expolanka’s Investment sector contributed a revenue of Rs. 760 million for the quarter and Rs. 3.2 billion for the year. The sector includes the group’s export operations, IT services and corporate office. Expolanka Ltd., the international trading wing, exports to established and emerging markets. ITX360 offers a portfolio of services including consultancy and development to support top Sri Lankan conglomerates. 

While announcing its performance, Expolanka management highlighted upon the Group’s ability to weather a highly uncertain and rapidly evolving environment for businesses around the world. Although frank about the impact of COVID-19 uncertainties on “business as usual”, the management stressed that it continues to monitor the situation carefully and take steps to ensure that staff remain safe and healthy, customers are serviced efficiently and performance related risks are mitigated in the best possible manner.