Expolanka achieves record 1st half FY 2021/22 performance with a 190% revenue growth
Announcing its financial results for the 2nd quarter of the financial year, Expolanka Holdings PLC once again reported exceptional results driven by the continued growth of its Logistics business.
For the quarter ended 30 September 2021 (Q221), Expolanka recorded a Profit After Tax of Rs 12 Bn, at a 166% increase Year on Year (YoY). Revenue for the quarter was Rs 151.4 Bn marking a YoY increase of 208%. Its Gross Profit was Rs 22.6 Bn for the quarter, a 114% increase YoY.
Although the macroeconomic and external environment remained dynamic during this period with continued supply chain disruptions, Expolankastayed focused on the core fundamentals of its business operations, delivering strong volume growth whilst adopting proactive procurement strategies and pursuing operational efficiencies. In his quarterly message to stakeholders, Group CEO Hanif Yusoof said “The continuous success achieved by the company is a reflection of our ability to execute well-defined strategic initiatives effectively whilst remaining agile and nimble amidst this dynamic external environment.” He noted that the company was now a truly global organization with a geographic footprint covering 32 countries, with a majority of business generated from leading international clients outside of Sri Lanka.
In its Logistics business, the sector recorded its best quarterly performance with a record quarterly revenue of Rs 150.2 Bn (210% increase YoY) and Rs 12.1 Bn Profit After Tax (157% increase YoY). A holistic approach to business has been the hallmark of success for the company; an aggressive sales strategy was well supported by a cohesive network-wide approach aimed at service delivery and securing capacity, which aided in generating healthy yields. Significant growth in volumes was witnessed across Air Freight and Ocean Freight products offered by the company. Expolanka tapped into this demand whilst also benefitting from the gradual recovery of global trade, bringing in new strategic customers supported by enhanced services across the supply chain. The company currently services leading global brands across a variety of key growth verticals.
In its Air Freight product, Expolanka saw increased volumes from several strategic customersacross multiple industry verticals by meeting customer demands effectively and efficiently, thus keeping to its brand promise of growing business and transforming supply chains. Efforts by EFL Origins in ensuring uninterrupted services despite certain markets undergoing strict lockdown measures further augmented its capabilities to operate in a disrupted environment.Similarly, the Ocean Freight product also grew during this quarter as a result of increased customer penetration and a growing partner network.
The enhancement of origin capabilities in Sri Lanka, India, Vietnam, China and new markets such as Malaysia and Thailandwas a result of the company building infrastructure and capabilities in these markets.
EFL also carried out several charter operations during the quarter under review- further evidence of the company’s agile operating capabilities in a disrupted environment to meet customer expectations. The North America Trade Lane continued to deliver extraordinary growth, whilst the European and Intra Asia Trade Lanes experienced stable growth.
EFL completed two key acquisitions during the quarter under review. The company acquired IDEA Logistics LLC, a US based central American logistics company to fulfil emerging opportunities in relation to near shoring strategies adopted by US brands. This acquisition is also part of the company’s overall long-term geographic expansion plans to be present in key growth markets. EFL’s own business in the region has steadily grown over the last few years, and the acquisition enables the company to entrench itself in this market thus consolidating its service capabilities to customers in this market. EFL also concluded the acquisition of Complete Transport LLC, a bonded CFS and trucking company in New York, thus complementing its previous acquisition of Seville (another trucking company based in New York) which will enable the company to secure presence, capabilities, and infrastructure in all key trade gateways in North America.
In the Leisure sector, Expolanka remained resilient generating a revenue of Rs 244 Mn (206% growth YoY) despite bleak external conditions, by adapting its business portfolio to the new travel normal. The Investment sector generated a revenue of Rs 1 Bn (58% growth YoY) driven by exports and a strategy of moving into high margin products with less volatility. The IT business also gained ground during the quarter with improved contribution to the overall growth of the group.
The company also continued to place significant emphasis on its Environment, Social and Governance Framework by adopting proactive practices aligned with overall strategic initiatives. During the quarter, Expolanka continued to support the healthcare sector with donations of critical healthcare equipment to various hospital networks in the country. In addition, it stayed true to its commitment to the UN’s Sustainable Development Goals and its own green logistics drive, participating in several global initiatives.
Expolanka noted that the company expects the outlook for the North American market to remain steady for the next several months and for the European and Asian markets to open up gradually. The pandemic has resulted in long term changes in consumer behaviour, with evolving market conditions and nimble supply chains, noted Yusoof. “As a company, Expo will stay agile in meeting these challenges and leveraging strategic new opportunities with the single focus of creating value for our stakeholders,” he said. He credited the company’s organizational culture for enabling Expolanka to continue its strong upward momentum, noting that leadership focus on people-driven growth contributed to the record growth numbers recorded during this quarter, which led to the company surpassing its revenue from the last year during the first six months of this financial year.