Expolanka sees slowing trade volumes amid softening global economy

Goes on shopping spree acquiring companies using its massive free cash flow built during pandemic years

The performance at Expolanka Holdings PLC continued to moderate in the three months ended in March 2023, as the trade volumes of its key North American trade lane slowed down, in response to the slowdown in economic activities amid rate hikes and inflation.

Meanwhile, the freight rates across both ocean and air lines continued to fall from the exponential levels they reached during the two years of the pandemic through 2021.
The group reported revenues of Rs.55.17 billion in the three months under review, down 77.2 percent from Rs.242.05 billion in the same period in 2022. 

This resulted in the group reporting a loss of Rs.1.19 billion or 60 cents a share, compared to a profit of Rs.31.35 billion or Rs.16.04 a share in the same period last year. 

For the financial year ended in March 2023, the logistics behemoth reported a profit of Rs.30.94 billion or Rs.15.88 a share, compared to Rs.72.74 billion or Rs.37.24 a share. 
The Expolanka share added Rs.2.25 or 1.43 percent on Friday, to settle at Rs.160.00, giving a market value of Rs.312.8 billion to the company.  

“Demand supply imbalances continue to impact the industry. On the supply side, freight capacity continues to increase across both ocean and air portfolios, whilst the pandemic-led demand surge, which fuelled volume growth in the previous year, eased off, resulting in volumes across air and ocean products witnessing a reduction, thereby further reducing freight rates,” said Expolanka CEO Hanif Yusoof. 

The group continued to expand and solidify its presence in the North American lane through two major acquisitions valued at Rs.35.0 billion in the final quarter.  In one transaction, the company paid US $ 42.5 million in February to acquire the 100 percent stake in Trans American customs broker (Trans AM Group), a North American-based customs brokerage company. In another, it paid 90 million Canadian dollars to purchase the entire stake in Locher Evers Inc. (LEI Group), a Canadian-based family-owned freight forwarding business. 
The group ended the year with an operating cash flow of Rs.170 billion and it settled loans worth of Rs.84.3 billion, reducing its gearing to 21 percent. 

The group’s other two significant business segments – leisure and investments – too generated better top and bottom line performances in the financial year.  Japan’s SG Holdings Global PTE Limited has 82.43 percent in Expolanka.