ExpolankaHoldingsPLCAR2021-22.pdf - Flipbook - Page 41
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EXPOLANKA HOLDINGS PLC
INTEGRATED ANNUAL REPORT 2021/22
GROUP CEO’S
REVIEW
Dear Stakeholder,
OPERATING ENVIRONMENT
GROUP RESULTS
It is with a sense of honor that I pen my thoughts for
the Annual Report for the financial year 2021/22. A
year that has seen Expolanka grow from strength
to strength, solidifying our position amongst the
leading logistics is an outcome of your organization’s
transformative journey over the last several years
companies globally. The outstanding financial results
are among many of your organization's transformative
journeys over several years.
Operating on a global scale, our business witnessed
the headwinds of the resurgence of international
trade as major global economies opened up postpandemic. Market conditions have evolved but remain
very dynamic. Our key market, the United States, saw
visible growth in trade led by consumer spending due
to high disposable income and increased inventory
replenishments due to low inventory levels. Changes
in consumer spending patterns and demands were
experienced by several businesses which had to
adopt to these changing trends. The resurgence in
consumer spending was visible throughout the year
and was at its peak during Q3 of the financial year;
however, with slight corrections during Q4, which is
traditionally considered an off-peak season for the
retail industry.
Led by our Logistics sector and, more particularly,
EFL Global, The Group posted record revenue of
Rs. 694.2 Bn (YoY +217%). Growth in base volumes
across both air freight & ocean freight verticals
and elevated freight rates was the catalyst for this
substantial revenue growth achieved by the company.
Since inception in 1978, your company has always
strived to operate with one clear vision, to create
sustainable value for all our stakeholders, be it
shareholders, employees, business partners, or
regulators. This simple, clear objective has been
the benchmark of our decision-making process,
guiding us over this 44-year journey through various
development, growth, consolidation, and expansion
phases.
Today, your company is among the select few Sri
Lankan entities with a global footprint in 34 countries.
Over 95% of our group revenue is generated from
international markets, showcasing our profile as a truly
global enterprise.
Our consistent, comprehensive, agile, and congruent
strategy has been the hallmark of our success,
supported by our dare-to-do spirit, grit, determination,
and unyielding focus in executing our strategic
initiatives. This holistic unified approach to carrying
out our business operations has manifested our DNA
as a company. The results we see today reflect the
diligence, hard work, and efforts that have been put in
place, particularly over the last several years.
During the year, global supply chain challenges
persisted due to growth in demand, stretched
capacity, port congestions, and various challenges
in transport and warehouse space, all contributing
to severe pressure on supply chain and logistics
capabilities. This resulted in increased freight rates
which peaked during Q3 of the financial year.
Key origins such as India, Vietnam, Sri Lanka, China &
Hong Kong experienced pandemic-related restrictions
during a significant part of the year.
The global marketplace continues to face several
disruptions, including geopolitical tensions, regional
economic challenges, inflationary impacts, and
various other dynamic factors, which Expolanka
as a company will navigate through with our spirit,
determination, and agility.
The Group recorded a gross profit of Rs. 121.9 Bn
(YoY + 217%) resulting from the significant growth
in business and supported by adopting innovative &
proactive procurement strategies.
Our efficient business model, overhead structure,
and effective capital management strategies allowed
the business to witness strong operating leverage,
resulting in the Group's outstanding Profit after Tax of
Rs. 72.8 Bn (YoY +389%).
Demonstrating the efficacy of our capital structure,
asset utilization, and quality of earnings, the Group
generated above industry returns on ROE of 95.9%
and ROCE of 56.4%, respectively. These returns
indicate the strength of your organization's profile, the
efficiency of its business model, and the effectiveness
of its business strategy in creating shareholder wealth.
The logistics sector was the single most significant
contributor to group Revenue & profits, accounting
for 99% of the overall performance of the Group.
While most of our concentration was directed towards
enhancing and growing the logistics business, we
saw visible progress in our leisure sector, which saw
a recovery of its business in post-pandemic market
conditions. The reorganization of our investment
sector has resulted in the stability of the company's
business operations.
