BY Shenal Fernando
Expolanka Holdings PLC became the second company listed in the Colombo Stock Exchange (CSE) to achieve a market capitalisation of Rs. 500 billion yesterday (29) when it closed the day at Rs. 263.5 which represents market capitalisation of Rs. 515.1 million and an 8700% gain compared to its share price in January 2020.
Expolanka was the second most traded company in the exchange yesterday with over 4,715 trades made at a volume of 7 million shares, behind only Ex-pack Corrugated Cartons Ltd. and closed the day at Rs. 263.5, up 6.6% (Rs. 16.25) from the previous day’s close of Rs. 247.25.
During 2Q FY2022 Expolanka recorded a profit after tax (PAT) of Rs. 12 billion, which represents 166% year-on-year (YoY) increase. Revenue for the quarter was Rs. 151.4 billion, marking a YoY increase of 208%. Its gross profit was Rs. 22.6 billion for the quarter, a 114% increase YoY.
In his quarterly message to stakeholders, Expolanka Holdings Group Managing Director (MD) and Chief Executive Officer (CEO) Hanif Yusoof said: “The continuous success achieved by the company is a reflection of our ability to execute well-defined strategic initiatives effectively whilst remaining agile and nimble amidst this dynamic external environment.”
He noted that the company was now a truly global organisation, with a geographic footprint covering 32 countries and a majority of business generated from leading international clients outside of Sri Lanka.
This bull run experienced by Expolanka which has made it the most valuable entity listed in the CSE can be traced to the transformation of this local logistic company into a US-centric multinational company with over 75% of its revenue being derived from its subsidiaries operating in the US trade lane.
Increased consumer demand in the US following the March stimulus and the high yield rates enjoyed by Expolanka due to high global air and sea freight rates have proved to be the main catalysts behind Expolanka’s rise.
According to the Baltic Exchange Air Freight Index, over the past 12 months airfreight rates have increased by over 64%. Whereas, sea freight rates have increased by over 400% according to the Freightos Baltic Global Container Freight Index. The reasons for such increase included soaring consumer demand, capacity shortage and saturated ports leading to higher container turnaround rates. However, fears of the resurgence of Covid-19 has led to a fall in global freight rates which may lead to a decrease in profitability quarter-on-quarter (QoQ).
