Better logistics ops lift Expolanka March quarter earnings

The growing global trade volumes across all trade lines kept both air and ocean freight operations busy at Expolanka Holdings PLC during the January-March quarter, giving the much-needed impetus to the logistics player’s top and bottom lines. 

Expolanka reported revenues of Rs.18.8 billion for the quarter ended in March 2018, up 24 percent year-on-year (YoY), while the earnings grew by 21 percent YoY to Rs.308.8 million or 16 cents a share.  

Expolanka said the performance reflects the growth in volumes across all key product and trade lines. 
The expensive air freight operations have contributed significantly towards the business growth while ocean freight operations are continuing to grow at strong numbers, the company said in a statement without giving the numbers separately for each business line. 

“All key trade lanes performed to expectation during the quarter with the business being able to substantially consolidate its South Asia and East Asia operations,” the statement added. 

The warehousing business – part of third party logistics operations, better known as 3 PL – has continued to show improvements, delivering sustainable earnings driven by focus on building operating scale and efficiencies.

Expolanka is one of the largest 3 PL operators in Sri Lanka and the logistics sector performance is a barometer of the direction of the global trade. The synchronized growth in the global trade flows led by the United States is having positive spillover effects on emerging and frontier market economies and it is reflected in their logistics operations. 

For instance, in March 2018, Sri Lanka’s textile and garment exports recorded the highest value of US $ 487 million since November 2013, mainly due to the increase in garment exports to the USA, the export data issued by the Central Bank showed last week. 

Meanwhile, for the year ended in March 2018, the Expolanka group reported Rs.77.5 billion in revenues growing by 22 percent YoY. But the earnings fell by 26 percent YoY to Rs.710.9 million or 36 cents a share. 

“The group further witnessed its gross profit margins improving over the last two quarters ending the year at 17.1 percent in line with margins recorded last year,” the statement said. 

The logistics business accounted for Rs.73 billion of the revenue, which recorded a growth of 34 percent YoY. 

Meanwhile, the group’s leisure sector experienced a 73 percent YoY decline in revenues to Rs.1.3 billion, while the profit after tax fell by 17 percent YoY to Rs.168.6 million. 

The investments segment, which captures the group’s other business interests, saw its revenue declining by 25 percent YoY to Rs.3.3 billion, while the earnings fell by 18 percent YoY to Rs.556.9 million.    

Japan’s SG Holdings Global Pte. Ltd had a 67.48 percent stake in Expolanka as of March 31, 2018.