Expolanka braves COVID-19 to report stellar 1Q amid strong logistics sector show

• Group revenue surges 58% to Rs.36bn
• Net profit up nearly 500% to Rs.1.7bn
• Logistics sector profit up 430% to Rs.1.96bn

Amidst an external environment that continues to remain challenging, Expolanka Holdings has recorded stellar performance during the first quarter of the new financial year (1Q21). 
The group generated revenue of Rs 36.2 billion for the quarter, an increase of 58 percent year-on-year (YoY) as a result of strong logistics sector performance. 

The group posted gross profit of Rs 6.2 billion and net profit of Rs 1.7 billion, a 494 percent increase YoY. 

The group’s core logistics business led the performance, posting strong earnings whilst the leisure and investment sectors remained subdued during the reporting period.

“Expolanka announced these results as most economies around the world, including cities in which it maintains offices and operations, continue to impose strict lockdown measures. 
Although overall volumes across all verticals were subdued due to low demand from regular operations, the group was successful in optimizing opportunities to serve existing customers and bring in new business,” Expolanka said in a statement. 

The group’s core logistics business generated revenue of Rs.35.6 billion, recording 64 percent YoY increase. The segment’s after-tax profit rose 430 percent YoY to Rs.1.96 billion. 
The company statement said its core brand, EFL tapped into new business opportunities providing solutions for personal protective equipment (PPE) related shipments, which global manufacturers pivoted to producing during this time. 

“The sector leveraged longstanding relationships with carrier partners and optimised the performance of its origins to ensure fast and efficient PPE delivery for clients. Furthermore, EFL developed its service offering to the tech and pharma businesses during the time,” the statement added.

With various economies reopening in May, Expolanka saw a gradual return of regular business operations as well, which augmented its overall performance. The US Trade Lane operations remained the most active while Intra-Asia and Europe Trade Lanes remained stable, though at muted operational levels.  In its statement, the company noted that the air freight market had an extraordinary uptick in rates during the period due to closed airports leading to fewer flights and reduced capacities.  “Relying on its capacity to meet additional working capital requirements, EFL overcame the challenge and secured higher yields across operations by adopting effective and dynamic procurement strategies in this heightened air freight market,” the statement noted.The sector’s contract logistics business continued to impress during the quarter. The momentum in stability and growth that was achieved in previous years was maintained during the quarter under review as well. The group’s leisure sector was significantly impacted by the pandemic, recording a loss of Rs.73 million for the quarter. To mitigate the impact of closed airports and a temporarily stagnant travel and leisure market, the sector implemented short-term cost reduction measures and a robust restructuring programme to enable leaner operations with a focus on the core corporate travel business. 

The investment sector remained stable during the quarter generating revenue of Rs.549 million. Although performance was muted with most international markets closed, the largest contribution came from export operations.

Japan’s SG Holdings owned 75.62 percent of the issued shares of Expolanka as at June 31, 2020, up from 68.19 percent three months ago.