Sri Lanka’s Expolanka elevates to a first with US$ 2 billion market capital
Daily FT: Relatively young Expolanka Holdings PLC added another feather to its corporate cap by becoming the first Sri Lankan company to be worth over US$ 2 billion in a short span of time apart from being the country’s most profitable.
The tag of “first US$ 2 billion” company was achieved last Friday when Expolanka’s share price closed at Rs. 209 up by 3.7% or Rs. 7.50 last Thursday. On Friday it had garnered a market value of Rs. 408.58 billion or US$ 2.01 billion. For the week it gained by 13.25% and touched an intra-week high of Rs. 209.75. When Expolanka became the most valuable listed entity on 23 August its price was Rs. 122.50 and market capitalisation was Rs. 240 billion. It ended 2020 with a market capitalisation of only Rs. 57 billion and was ranked at number 13.
Between September 2020 closing and to last Friday, Expo share price reflects a whopping 1,717% gain. From the end June-2020 closing, the last week’s price is a whopping 6,431%. Expolanka Holdings Founder, shareholder and Group Managing Director Hanif Yusoof, when contacted by the Daily FT on reaching the US$ 2 billion company milestone, said the beneficiaries of the company’s growth have been shareholders, customers, partners and employees apart from Sri Lanka itself and the Colombo stock market.
“After listing Expolanka, the aspiration was to be among the Top 10 but the universe has to date given Expolanka more than what we imagined,” said the low profile and unassuming Hanif.
Japan’s SG Holdings Global Ltd. owns 75.6% stake in Expolanka Holdings while Hanif Yusoof owns 7.5%. In tandem with its upsurge, Expolanka has seen the public shareholder base increasing by nearly 4,500 since FY20 to 13,719 by June 2021 whilst the public float is 16.6%.
COVID-induced opportunities saw Expolanka end FY21 with a hefty net profit of Rs. 14.8 billion as opposed to a loss of Rs. 438 million in FY20. Group revenue rose by 111% to Rs. 218.7 billion. In the first quarter of FY22, it saw a 259% YoY growth in Group Profit After Tax to Rs. 6.3 billion and a 165% YoY increase in Group revenue to Rs. 95.7 billion.
To bolster its business, Expo did several strategic acquisitions, a route it is likely to pursue further. In the past six months, Expolanka has made three acquisitions investing US$ 18 million. Latest was in early September acquiring 100% stake in US-based bonded container freight station and trucking services Completre Transport System LLC for US$ 6.1 million.
In August it acquired Central American firm IDEA Logistics LLC and its group of companies for US$ 9.7 million. In March Expolanka bought 100% of US Seville Container Freight Station Inc. and related companies for US$ 2.2 million.
The success story of Sri Lanka’s Expolanka is indicative of the business conducive environment in the country that has made way to build a strong and growing private sector in the country. Sri Lanka’s private sector has recorded profits despite pandemic challenges and the country’s economy after showing great resilience is now on the path to recovery. Sri Lanka’s geographical positioning in the Indian Ocean, the many trade agreements as well as concessions enjoyed by the country and the continuously improving ease of doing business environment in the country have all contributed to Sri Lanka’s path to becoming an emerging business destination in the South Asian region. The country’s economic expansion and ongoing development programme have opened many business/investment opportunities. Also, foreign businesses/investors could look at setting up base in Sri Lanka or even forming partnerships or joint ventures with local businesses to engage with other countries.
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