Elevation in freight rates positively falls on Expolanka Holdings PLC

Expolanka Holdings PLC’s global logistics sector is generating outstanding earnings for the group due to the continuous rise in freight rates, according to a report by First Capital Research.

“Global air freight rates increased by 33.6%YoY to USD 4.49/kg in early Jan 2022 whereas the rate hit an all-time high of USD 5.36/kg in Dec 2021 during the festival season. Moreover, the global Ocean freight rates also elevated by 137.9%YoY to USD 9,167 per 40ft container in Jan 2022,” it said.

“USA total apparel imports are estimated to record a growth of 21.1%YoY to USD 77.7Bn in 2021 and is further expected to rise above the pre-pandemic level by 2023. As a result, EXPO has a great potential to expand its profitability since the revenue growth is mainly supported by the North American trade lanes. Being one of the preferred freight forwarders for apparel exporters, EXPO has recorded growth in earnings by 91.7%QoQ in 2QFY22,”

“EXPO is likely to continue to record strong earnings growth for 3QFY22 since 60% – 70% of the revenue is likely to generate from air freight. Moreover, due to supply-side constraints and delays in sea freight the air freight rate hike is not anticipated to reverse any time soon,” First Capital said.