Air freight operations give lift-off to Expolanka’s 2Q

• Records Rs.4.5bn net profit on Rs.49bn revenue 
• Says since market returns to normalcy, yields are likely to taper off

Expolanka Holdings PLC secured exceptionally strong top and bottom line growth during the quarter ended on September 30, 2020 (2Q21), largely as a result of a focused and consistent strategy, along with the ability to stay agile and optimise opportunities presented in a dynamic operating environment. 

Fuelled by surging demand for emergency supplies via air freight into North American markets, group revenue expanded by 71 percent year-on-year (YoY) to Rs.49.1 billion while earnings for the period was Rs.4.5 billion, against a loss of Rs.807 million a year ago. 

Growth in the logistics sector was attributed to key strategic initiatives undertaken by the company, in addition to its ability to pivot to opportunities in the market, particularly in response to the need for emergency medical supplies and personal protective equipment (PPE) essential to combating COVID-19, on extremely tight schedules.    

“With economies tentatively opening up, regular business was starting to return by the end of the quarter while PPE orders were gradually easing. However, the company stands fully geared to service new opportunities, which may present itself in such an evolving environment,” Expolanka said in a statement.

Lower volumes of freight during 1Q21 and the initial weeks of 2Q21, were largely offset by a spike in airline rates, leading to the group’s logistics sector recording a 76 percent YoY increase in revenue, up to Rs.48 billion in the first half.

The impressive growth in the air freight market has displayed signs of a return to normalcy and the company said yields are likely to taper off as market conditions stabilise in the coming months.

Activity across Europe and intra-Asia trade lanes remained fairly muted. However, these conditions were largely offset by surging demand from North American trade lanes—the largest contributor of business. 

The company’s 3PL business continued to record healthy growth.  Enhanced agility across sales, procurement and origin operations enabled the group to operate in the most efficient manner. This was augmented by the group ERP platform, which utilised automation and standardisation to enhance operational capabilities.

A key factor in the success of the company’s logistics business has been its customer centricity, which it further enhanced with technological capabilities, while providing visibility to customers and securing greater efficiency across the breadth of its operations.

Like all of its industry peers, the performance of Expolanka’s leisure sector was significantly impaired during the quarter, as the pandemic forced the prolonged closure of airports and the institution of travel bans across the globe.

Consequently, the sector redirected its focus towards restructuring business operations with a view to optimise opportunities when normalcy returns, while exploring new opportunities in serving innovative and experiential travel requirements emerging from a post-COVID landscape.

Over the short to medium term, these will include a greater emphasis on serving the domestic market, while restructuring the business in order to remain lean and efficient. Meanwhile, the group’s investment sector generated revenue of Rs.635 million, driven primarily by its support for export operations. Similarly, its technology services company, ITX, was also able to secure encouraging and stable growth during the quarter in review.