Expolanka profits surge in June amid higher airfreight volumes

Expolanka Holdings PLC delivered yet another solid quarter in June (1Q22) with massive jump in revenues and soaring profits as the company continued to benefit from the increased share of air freight amid persistent disruptions to the ocean freight industry due to shortage of containers, port congestions and fresh challenges from the Suez Canal blockage. 

The logistics juggernaut reported revenues of Rs.95.7 billion for the three months under review, logging a 165 percent jump from the same quarter a year ago, as global trade was picking up specially in the North American trade line generating business for both ocean and air freight.  This is because the United States economy reached pre-pandemic levels in the second quarter resulting in a robust demand for goods from all over the world. 

The company recorded nearly four-fold increase in its earnings during the quarter as it reported earnings of Rs.3.22 a share or Rs.6.29 billion compared to earnings of 90 cents a share or Rs.1.75 billion in the corresponding period last year. 

The company’s share, which became an investor favourite since the virus broke out last year, further added 30 cents or 0.45 percent last Friday to end at Rs.67.0 giving the company a market capitalisation of Rs.130.9 billion. The company’s stock was trading at just Rs.2.00 a piece on March 31, 2020 when the virus-related restrictions became more widespread for the first time around the world, disrupting global supply chains. 

Expolanka became one of the early beneficiaries of the pandemic-induced logistical challenges, as the company was well-poised to handle the situation, while business shifted towards the more expensive air freight segment since the pandemic strained the widely used ocean freight segment.

“The air freight product delivered significant volume growth during the quarter, where the main thrust of this growth was the increased business from several strategic customers,” said Expolanka CEO Hanif Yusoof.

“The disruptions experienced in the ocean freight industry, further strengthened the air freight segment,” he added. 

However the company continued to grow its ocean freight segment by penetrating into new customers and growing its partner network. 

Yusoof said while the outlook for the North American market remains positive for the next several months, the European and the Asian makers are also seeing a gradual re-opening, boding well for the company’s key logistics business in the ensuing period.

Meanwhile, Expolanka’s leisure business generated revenues of Rs.151.7 million, up significantly from Rs.27.8 million a year ago, while the investment segment generated revenues of Rs.641.3 million, up 17 percent from a year ago, although both segments are still in red.   

Japan-based, SG Holdings Global Pvt. Ltd held 75.62 percent stake in Expolanka by June-end, while Yusoof held 7.52 percent stake being the company’s second largest shareholder.