Expolanka : Interim Financial Statements quarter ended 31st December 2021

EXPOLANKA HOLDINGS PLC INTERIM REPORT

NINE MONTHS ENDED 31ST DECEMBER 2021

CEO Message

Dear Shareholder,

I am pleased to submit the Interim financial statements of Expolanka Holdings PLC for the quarter ended 31st December 2021. Your company was able to conclude the calendar year delivering its best ever quarterly results to date.

The Group recorded a Revenue of Rs. 204.9BN (YoY + 254%), a Gross Profit of Rs. 38.7BN (YoY + 299%) and a Profit after tax of Rs. 23.0BN (YoY + 405%) for the quarter ending 31st December 2021.

The focus of your company remained on executing a consistent and well defined strategy, which is reflected in our performance over the last several quarters.

Your company's agile approach has been the hallmark of its success in navigating through the current dynamic market environment.

Logistics Sector

The Logistics sector remained the catalyst of the group performance recording a revenue of Rs. 203.7BN (YoY +255%) a gross profit of Rs. 38.4BN (YoY +303%) and a PAT of Rs. 23.0Bn (YoY +384%) for the quarter. A unified holistic approach with an unyielding focus on the core fundamentals of the business underscored this exceptional performance.

A customer centric strategy focused on expanding volumes across both air freight & ocean freight products enabled the company to continue increase wallet share as well as attracting new strategic accounts. The customer portfolio serviced by the company is now diversified, robust and includes a multitude of leading global brands across a variety of key verticals.

The aggressive sales strategy was supported by a clear and well thought out proactive procurement strategy, which enabled the business to secure capacity efficiently. The procurement teams along with key origins complemented the overall efforts by the organization which aided in maintaining stable yields.

The Air Freight product delivered significant volume growth QonQ, where the main thrust of this growth was the increased business from several strategic customers. Your company's continued ability to meet customer demands effectively and efficiently, helped in fulfilling our brand promise of facilitating the growth of our customers. This was further augmented by efforts of EFL Origins in ensuring service delivery, despite some of these markets undergoing strict lockdown measures.

The Ocean Freight product saw significant growth during the quarter, a result of EFL's emphasis in developing this portfolio. Increased customer penetration and a growing partner network enabled EFL to further strengthen and grow the product. This segment has faced a variety of challenges, from shortage of containers, Port congestions and further backlogs caused by various other disruptions. Although these challenges weighed heavily on the business, EFL was able to raise the bar in delivering solutions and services to its customers, resulting in exceptional performance from the Ocean Product.

The Industry continued to experience demand supply imbalances due to growth in US retail sales, lower inventory levels, constrained belly capacity, which were further stretched due to disruptions in the Ocean Freight vertical. This has resulted in Freight rates across Air & Ocean products remaining at elevated levels, where the industry witnessed all time high rates during the quarter.

The sector continued to focus on origin capabilities, and significant effort was expended in developing infrastructure and know how in these markets. Origins such as Sri Lanka, India, Vietnam, China have performed remarkably well, whilst new markets such as Malaysia and Thailand have seen significant growth in business, an endorsement of the company's regional expansion strategies.

Whilst the North America Trade lane remained the key driver of business the European and Intra Asia business remained resilient with stable growth during the quarter.

Leisure Sector

The sector was able to consolidate its performance during the quarter generating a Revenue of Rs. 298MN (YoY + 243%). The proactive, resilient and long term focused approach undertaken by the company has enabled the company to drive operational efficiencies across the business. The sector is yet recovering from the impacts of the pandemic, however, the spirited approach of the business will enable the organization to efficiently adapt to the new normal environment.

Investment Sector

The Investment Sector recorded a revenue of Rs. 917MN (YoY +92%), with the main contribution from the export operation. The portfolio strategy of moving into high margin products with less volatility is driving the growth of the sector. The IT business too is gaining ground with improved contributions to the overall growth of the group.

Social Consciousness & Governance

Your company places a significant emphasis on Environmental, Social and Governance initiatives (E S G) and have adopted several proactive practices & initiatives which are aligned to its overall strategic objectives. Placing a great emphasis on Women's empowerment, your company initiated a project focusing on women's empowerment to uplift and empower deserving female entrepreneurs in Sri Lanka by providing them with financial support and technical expertise.

Several other initiatives were undertaken on a global scale, keeping in mind our commitment to the UN Sustainability Goals and our green logistics initiatives.

Outlook

The Calendar year 2021 was a strong and stable year for global commerce, as most key markets experienced post pandemic recovery. Although pandemic impacts are gradually easing as the world adopts to the new normal, markets are expected to remain disrupted during the near term. The outlook for the company's key consumer market, North American, remains steady, whilst the European and Asian markets are expected to see a gradual opening.

The pandemic has resulted in long term changes to consumer behaviour, evolving market conditions and nimble supply chains. As a company, Expo will remain committed to meet these challenges whilst moving forward to take advantage of opportunities with the single focus on creating value for all our stakeholders. The growth strategy adopted by the group will continue to be pursued, with a focus on the fundamentals of the business whilst remaining agile.

Hanif Yusoof

Group CEO

27th January 2022

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at

ASSETS Non-current assets Property, plant and equipment Right-of-use assets Intangible assets

Investment in an associate and joint ventures Other financial assets

Deferred income tax assets

Current assets

Inventories

Trade and Other Receivables

Amounts due from related parties

Prepayments and other assets

Other financial assets

Income tax recoverable

Cash and cash equivalents

Total assets

EQUITY AND LIABILITIES Stated capital Reserves

Retained earnings

Equity attributable to equity holders of parent Non-controlling interest

Total equity

Non-current liabilities

Financing and lease payables

Deferred income tax liabilities

Retirement benefit obligation

Current liabilities

Financing and lease payables

Trade and other payables

Amounts due to related parties

Income tax liabilities

Total equity and liabilities

Net asset per share

Un Audited	Audited
31.12.2021	31.03.2021

3,945,738,013 3,413,329,344

4,764,618,778 3,717,652,775

3,909,999,353 1,039,413,373

352,430,593 288,160,986

13,072,31112,731,840

224,056,715 170,296,117

13,209,915,763 8,641,584,435

216,537,786 148,911,083

171,078,547,570 49,089,439,347

103,103,909 134,311,547

7,433,469,872 1,869,186,630

186,186,376 342,756,064

349,089,198 347,370,073

28,980,207,971 7,610,756,231

208,347,142,682 59,542,730,975

221,557,058,445 68,184,315,410

4,097,985,000 4,097,985,000

2,200,625,396 1,614,493,928

60,537,310,627 21,436,678,527

66,835,921,023 27,149,157,455

292,081,670 231,434,841

67,128,002,693 27,380,592,296

9,197,090,199 5,532,778,654

9,104,55620,928,710

748,203,628 764,523,925

9,954,398,383 6,318,231,289

90,248,896,979 12,854,627,585

49,906,551,749 20,729,264,265

137,793,18561,863,063

4,181,415,456 839,736,912

144,474,657,369 34,485,491,825

221,557,058,445 68,184,315,410

34.1913.89

These nancial statements are in compliance with the requirements of the Companies Act No. 7 of 2007.

[SIGNED]

…………………………………

Mushtaq Ahamed

Director - Group Finance

The Board of Directors is responsible for the preparation and presentation of these nancial statements. Signed for and on behalf of the Board by,

[SIGNED]	[SIGNED]
…………………………………	…………………………………
Hanif Yusoof	Sanjay Kulatunga
Director	Director

27th January 2022

01/

CONSOLIDATED INCOME STATEMENT

02/
							Three months ended 31st December	Nine months ended 31st December
							Un-Audited	Un-Audited Change %	Un-Audited	Un-Audited	Change %
							2021	2020		2021	2020
						Revenue from contracts with customers	204,954,118,254	57,881,623,815	254.09	452,110,918,145	143,222,820,904	215.67
						Cost of sales	(166,195,977,406)	(48,179,945,526)	244.95	(376,291,871,461)	(116,698,202,044)	222.45
						Gross profit
						38,758,140,848	9,701,678,289	299.50	75,819,046,684	26,524,618,860	185.84
						Other operating income and gains	388,547,643	79,109,381	391.15	493,149,449	190,273,776	159.18
						Administrative expenses	(11,669,708,947)	(4,757,856,257)	145.27	(24,882,019,070)	(12,948,074,779)	92.17
						Selling and distribution expenses	(946,916,150)	(342,227,939)	176.69	(2,358,060,926)	(1,165,749,281)	102.28
						Finance cost	(395,402,123)	(92,312,269)	328.33	(688,634,494)	(290,115,712)	137.37
						Finance income	21,519,203	19,995,868	7.62	61,130,388	40,068,852	52.56
						Share of results of equity accounted investees (net of tax)	40,810,272	326,299	12,407.02	76,564,480	32,174,643	137.97
						Profit before tax
						26,196,990,746	4,608,713,372	468.42	48,521,176,511	12,383,196,359	291.83
						Income tax expense	(3,144,086,881)	(48,326,732)	6,405.90	(7,086,661,215)	(1,523,646,998)	365.11
						Profit for the period
						23,052,903,865	4,560,386,640	405.50	41,434,515,296	10,859,549,361	281.55
						Attributable to:
						Equity holders of the parent	23,041,243,619	4,551,157,106		41,387,882,648	10,830,923,445
						Non- Controlling Interest	11,660,246	9,229,534		46,632,648	28,625,916
							23,052,903,865	4,560,386,640		41,434,515,296	10,859,549,361
						Basic earnings per share
						11.79	2.33		21.20	5.55

03/

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Three months ended 31st December		Nine months ended 31st December
Un-Audited	Un-Audited	Change %	Un-Audited	Un-Audited	Change %
2021	2020		2021	2020

Profit for the period	23,052,903,865	4,560,386,640	405.50	41,434,515,296	10,859,549,361	281.55
Other comprehensive income to be reclassified to state-
ment of profit or loss in subsequent periods
Net exchange differences on translation of foreign operations	504,173,570	54,650,536	822.54	600,145,650	8,661,557	6,828.84
Net other comprehensive income to be reclassified to state-
504,173,570	54,650,536	822.54	600,145,650	8,661,557	6,828.84
ment of profit or loss in subsequent periods
Net other comprehensive income not to be reclassified to	-	-	-	-	-	-
statement of profit or loss in subsequent periods
Other comprehensive income for the period, net of tax	504,173,570	54,650,536	822.54	600,145,650	8,661,557	6,828.84
Total comprehensive income for the period, net of tax
23,557,077,435	4,615,037,176	410.44	42,034,660,946	10,868,210,918	286.77
Attributable to:
Equity holders of the parent	23,541,157,070	4,603,775,676		41,974,014,116	10,840,538,810
Non-controlling Interest	15,920,365	11,261,500		60,646,830	27,672,108
	23,557,077,435	4,615,037,176		42,034,660,947	10,868,210,918