Expolanka Holdings PLC achieves Rs. 55 billion revenues in Q1 FY24
The Morning: Expolanka Holdings PLC, demonstrated incredible resilience, with a revenue of Rs. 55.5 billion and a Gross Profit of Rs. 11.2 billion, reporting financial results for the first quarter (1Q) of the 2024 financial year, that ended 30 June 2023, and remained steadfast in consolidating performance and pursuing its long-term strategy.
The large foreign earnings portfolio and foreign asset base of the group was again negatively impacted by the appreciation of the Sri Lanka Rupee which resulted in the group recording an exchange loss of Rs. 973 million for the quarter.
With global economies prioritizing inflation control and economic stability amid broader macroeconomic management, factors such as inflation, high interest rates, and geopolitical tensions have also curbed consumer spending, especially on discretionary items, resulting in dampened market demand.
The Logistics Sector delivered a revenue of Rs. 53.4 billion and a Gross Profit of Rs. 10.5 billion, whereas the Investment Sector achieved a revenue of Rs. 1.56 billion and a Gross Profit of Rs. 222 million, with the export operation stabilizing and the IT business making gradual progress.
Furthermore, the Leisure Sector demonstrated robust performance with a revenue of Rs. 750 million, a Gross Profit of Rs. 672 million, and a Profit After Tax of Rs. 253 million. The consistent performance was led by the core corporate travel business while the inbound and leisure portfolios showed positive momentum.
Demonstrating the group’s strong quality of earnings and cash flow generation capability, a dividend of Rs. 3.48 per share was declared, amounting to a total dividend payment of Rs. 6.8 billion. This strong liquidity position and balance sheet strength bodes well for the organization’s future success.
Amidst the downturn in the global economy, the logistics industry faced severe challenges. The pandemic-induced disruptions in demand and supply chains led to inventory overstocking and lower retail orders. Consequently, EFL Global’s volumes in both Air and Ocean portfolios were affected.
However, EFL Global proactively engaged with core customers and successfully onboarded several strategic accounts. Strategic measures including increasing wallet share from selected customers, maintaining a strong network presence, and adopting a customer-centric approach have significantly contributed to EFL maintaining its performance during the quarter. Reflecting the company’s adaptability and ability to respond effectively to market conditions, EFL Global gradually increased its Ocean Freight portfolio, which now generates more than 55% of its Revenue.
While the US market continued to be the key driver of business for EFL Global, European, and Asian trade lanes also performed to satisfaction. The company expanded its service capabilities in both origin and destination markets.
OSL take:
The achievements of Expolanka Holdings PLC are testament to the strength and growth of Sri Lanka’s private sector. It is further indicative of the overall strength and resilience of the country’s economy despite facing challenging economic conditions in the past few years. Many private sector businesses posted growth and profits during challenging times. Given that Sri Lanka’s economy is once again on a growth path after facing multiple challenges, foreign businesses/investors could confidently explore the growing business/investment opportunities in the country. Foreign businesses could also look at forming partnerships or joint ventures with local businesses with the aim of expansion. Sri Lanka’s business conducive environment has been further boosted by the country’s geographical positioning in the Indian Ocean and the strong trade ties enjoyed by the country.
| Article Code : | VBS/AT/20230822/Z_8 |