Expolanka Holdings PLC announced its financial results for the third quarter ending 31 December 2023, delivering a resilient performance, and leveraging its strengths despite global economic headwinds and uncertainty.

The Group reported a Revenue of Rs. 66.8 billion for the quarter and Rs. 183.9 billion for the nine months ending 31 December 2023. Gross Profit stood at Rs. 10.9 billion for the quarter, summing up to Rs. 34.2 billion for the nine-month period. A Net Loss of Rs. 5.1 billion was recorded for the quarter, contributing to a nine-month Net Loss of Rs. 12.3 billion.

Global trade faced challenges due to tightening monetary policies, high inflation, geopolitical tensions, trade protectionism, and elevated energy prices. These factors contributed to uncertainty, reduced consumer spending, and lower demand conditions.

Despite subdued global trade and fluctuating freight rates, Expolanka’s Logistics sector sustained its customer base and welcomed new clients, ending the quarter with Rs. 64.4 billion in Revenue and a Gross Profit of Rs. 10.2 billion. The sector experienced a Net Loss of Rs. 5.2 billion for the quarter. The sector also reported a revenue of Rs. 177 billion, a Gross Profit of Rs 32.1 billion and a Net Loss of Rs. 12.7 billion for the nine months of the financial year.

A drop in volumes and a steep decline in freight rates have impacted Revenue and Gross Profit, resulting in Operating Losses. Margins faced pressure due to declining freight rates and volumes. Profitability decline was visible across both Air and Ocean Freight and was more pronounced in the latter due to experiencing visible freight rate corrections during the year.

The Group reported that strategic investments to enhance domestic capabilities and recent international acquisitions namely, Trans American Global and the LEI Group, have performed to satisfaction whilst integration efforts have moved forward gradually.

With the company’s primary focus on strengthening customer relationships, EFL was able to retain all its core customers whilst witnessing growth in new customers. The strategy of enhancing service offerings and domestic logistics capabilities have had a positive impact both commercially and financially, establishing the group’s long-term vision as a global logistics company.

Additionally, EFL was able to leverage its strong network presence, market know-how, infrastructure capabilities and its experienced leadership team to bring to bear the exceptional value-added service offering to its customers. However, cost control initiatives are underway to improve profitability going forward while the recent acquisitions position the company well for long term growth.

The Leisure sector delivered strong results with Rs. 1 billion Revenue, a Gross Profit of Rs. 655 million and a Profit-After-Tax of Rs. 200.4 million. Robust corporate travel sales and recovering inbound and leisure travel segments boosted performance. Efficient operations and service excellence remain key success factors for the organization.

The Investment sector reported a steady quarter with Rs. 1.3 billion in Revenue and a Gross Profit of Rs. 33.8 million, reflecting stabilization in export operations and gradual progress in the IT business.

Prudent cash flow management and a low geared capital structure provided Expolanka the stability and flexibility to ride out external shocks, service debt and fund future expansion plans. Reinforced efficient working capital management has enabled the settlement of Rs. 10.02 billion in debt over the nine-month period. Working capital efficiencies also helped drive down finance costs and channel funds into growing operations. The focus on minimising finance costs has allowed for reinvestment into operations, maintaining a low-geared capital structure.

The company remains committed to long term investments across infrastructure, systems, and capabilities to actively strengthen its competitive positioning while driving improvements in operational and financial performance.

Committed to sustainability, the organization continues to prioritize Environmental, Social, and Governance (ESG) initiatives. Under its Global Goodness campaign, the Group has actively driven forward programs related to UN sustainability goals, green logistics, and support for women’s empowerment.

Despite the challenging macroeconomic environment, Expolanka Holdings remains agile to reducing challenges. The company is committed to its focus on business growth, efficiency improvement, and liquidity enhancement. Long-term strategies include continued investments in capabilities, infrastructure, and systems to navigate the evolving global business environment.