Expolanka : Interim financial statement as at 31st December 2022

SYNERGISED TO SUCCEED

INTERIM REPORT

NINE MONTHS ENDED 31ST DECEMBER 2022

CEO Message

Dear Shareholder,

I am pleased to submit to you the interim financial statements of Expo- lanka Holdings PLC for the quarter ended 31st December 2022. Pursuing a consolidation strategy, your company posted a Revenue of Rs. 94.2Bn, Gross Profit of Rs. 20.6Bn and a Profit after Tax of Rs. 3.0Bn. The combined 9 month performance for your company remains impressive with a YTD Revenue of Rs. 491Bn, Gross Profit of Rs. 85.9Bn and a Net Profit of Rs. 32Bn. International Business contribution remained above 95%, reflecting the strength of the earning potential of the company.

Your company has delivered an EPS of Rs. 1.54 for the quarter and Rs.

16.48 for the 9 Months generating a TTM ROE of 55.28% and ROCE of 37.03% as of December 2022.

Logistics Sector

The logistics sector navigated through the challenging macro-economic environment, adopting its long-term strategy and concentrating on the fundamentals of the business. Focus continues to be on strengthening customer relationships, expanding services, enhancing carrier partnerships, and improving operational efficiencies.

The logistics segment posted a Revenue of Rs. 92Bn, Gross Profit of Rs. 19.9Bn and Profit after Tax of Rs. 2.7Bn for the quarter under review. The above resulted in the sector delivering a YTD Profit after tax of Rs. 30.1Bn.

The sector experienced a reduction in operating volumes across both Air Freight & Ocean Freight products, led by the overall slowdown in global trade volumes impacted by high inventory levels, inflationary fears and the global energy crisis.

Your Company consolidated progress on the Ocean Freight product focusing on increased customer penetration, developing partner networks and enhanced competencies. Ocean rates remain tempered during the quarter with corrections in yields.

The challenging market conditions had a relatively larger impact on the Air Freight business, which saw weakening demand and reduced volumes.

Customers continue to remain loyal to EFL, reinforcing EFL's customer centric and intimate approach. EFL has enjoyed increase in wallet share of several customers, whilst making progress in attracting selective new customers.

The pandemic-led demand surge has subdued, easing pressure on capacity which in turn has normalized freight rates. Proactive procurement strategies have enabled the sector to retain yields, thereby resulting in improved margins.

The North American trade lane remained the critical business driver; whilst the European and Intra-Asia companies remained resilient.

EFL continued to make inroads into domestic logistics services in its core markets as the product complements its value offering to by enhancing capabilities in all core markets.

Key EFL origins delivered strong results, reflecting the success of the infrastructure investments made into these markets. Investments into building infrastructure and resource capabilities origins and increasing destination solutions will continue to be a key part of our strategy. The company remains consistent in pursuit of its long term vision whilst being cognizant of the current economic conditions.

Leisure Sector

The leisure sector, built momentum in the quarter under review delivering a healthy financial performance. Strengthening its market position, and focusing on efficient procurement and operational excellence, the sector was able to deliver a Revenue of Rs. 725Mn, Gross profit of Rs. 578Mn and Profit after tax of Rs. 202Mn.

The results underscore the success of the strategies adopted by the company in re-organizing its portfolio. Adopting a lean and efficient operating model focused on digitalization of the operational processes, enabled the business to further strengthen its position as a premier travel brand in Sri Lanka.

Investment Sector

The Investment Sector remained steady, recording a revenue of Rs. 1.6Bn and a Profit after Tax of Rs. 41Mn, with the main contribution coming from the export operation. The IT busi- ness, too, is gaining ground with improved contributions to the group's overall performance.

Cashflow & Gearing

Increasing emphasis on working capital management your company was able to improve cash from operations to Rs. 146.2Bn, further settling Rs. 83Bn in debt for the 9 Month ended period.

Social Consciousness & Governance

Emphasis continued to be placed on Environmental, Social, and Governance initiatives (E S G) and your company continued several proactive initiatives and projects aligned with its overall strategic objectives.

As a responsible and socially conscious employer attention continued to be placed on employee welfare and wellbeing particularly on the domestic front, as the company adopted to the challenging socioeconomic environment.

Carrying on from the initiatives undertaken under the Global Goodness banner the business continued to drive attention towards implementing programs across the UN sustainability goals, green logistics, and women's empowerment initiatives.

Outlook

The global macro environment continues to be volatile with market conditions remaining uncertain, with visibility and predictability being challenging.

Expolanka has demonstrated its capabilities to remain agile and adopt to these challenging conditions in the past. The company will remain unwavering in its approach to delivering on its strategic initiatives whilst adjusting to market challenges. EFL Global is now recognized among the leading freight forwarders in the world. The focus will remain on the long term as the organization looks towards the future, building capabilities, infrastructure and systems to face an ever changing and evolving global environment with the single focus of creating sustainable value for all stakeholders.

Hanif Yusoof

Group CEO

26th January 2023

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
31.12.2022	31.03.2022

9,140,557,899 5,750,794,286

12,607,042,061 10,837,147,918

4,038,685,730 3,835,125,688

431,030,394 392,222,671

21,560,74818,925,709

424,505,413 347,788,615

26,663,382,245 21,182,004,887

320,284,215 291,593,049

128,995,539,467 213,042,785,924

29,574,06063,724,751

7,886,362,018 14,258,827,284

820,388,689 225,982,529

429,574,479 4,096,562,968

74,575,931,248 43,192,921,348

213,057,654,176 275,172,397,853

239,721,036,421 296,354,402,740

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

49,648,646,818 27,986,114,800

107,960,220,088 91,847,724,124

161,706,851,906 123,931,823,924

755,916,925 422,115,702

162,462,768,831 124,353,939,626

17,980,166,793 15,134,573,848

121,489,86018,414,550

1,070,791,089 929,802,260

19,172,447,742 16,082,790,658

7,200,946,876 76,996,999,199

43,445,304,007 64,898,702,056

201,899,33596,861,771

7,237,669,630 13,925,109,430

58,085,819,848 155,917,672,456

239,721,036,421 296,354,402,740

82.7263.39

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

[Signed]

Divanke Fernando

Chief Financial Officer

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

[Signed]	[Signed]
Hanif Yusoof	Sanjay Kulatunga
Director	Director
26th January 2023

1

EXPOLANKA HOLDINGS PLC Interim Financial Statements

2 EXPOLANKA HOLDINGS PLC Interim Financial Statements

CONSOLIDATED INCOME STATEMENT

	Three months ended 31st December	Nine months ended 31st December
	Un-Audited	Un-Audited Change %	Un-Audited	Un-Audited	Change %
	2022	2021		2022	2021
Revenue from contracts with customers	94,280,892,235	204,954,118,254	(54.00)	491,231,171,441	452,110,918,145	8.65
Cost of sales	(73,641,699,184)	(166,195,977,406)	(55.69)	(405,278,653,594)	(376,291,871,461)	7.70
Gross profit
20,639,193,051	38,758,140,848	(46.75)	85,952,517,847	75,819,046,684	13.37
Other operating income and gains	167,483,156	388,547,643	(56.90)	6,327,041,002	493,149,449	1,182.99
Administrative expenses	(16,263,844,769)	(11,670,977,147)	39.35	(47,775,764,727)	(24,883,287,270)	92.00
Selling and distribution expenses	(656,116,711)	(946,916,150)	(30.71)	(3,825,230,430)	(2,358,060,926)	62.22
Finance cost	(278,225,441)	(400,522,274)	(30.53)	(1,438,478,630)	(693,754,645)	107.35
Finance income	246,581,159	27,907,555	783.56	359,603,112	67,518,740	432.60
Share of results of equity accounted investees (net of tax)	(2,800,616)	40,810,269	(106.86)	66,035,143	76,564,481	(13.75)
Profit before tax
3,852,269,829	26,196,990,744	(85.29)	39,665,723,317	48,521,176,513	(18.25)
Income tax expense	(841,324,546)	(3,144,086,881)	(73.24)	(7,444,155,499)	(7,086,661,215)	5.04
Profit for the period
3,010,945,283	23,052,903,863	(86.94)	32,221,567,818	41,434,515,298	(22.23)
Attributable to:
Equity holders of the parent	2,989,679,172	23,041,243,619		32,123,249,815	41,387,882,650
Non- Controlling Interest	21,266,113	11,660,246		98,318,005	46,632,648
	3,010,945,285	23,052,903,865		32,221,567,820	41,434,515,298
Basic earnings per share
1.54	11.79		16.48	21.20

3 EXPOLANKA HOLDINGS PLC Interim Financial Statements

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 %
	2022	2021		2022	2021
Profit for the period	3,010,945,283	23,052,903,863	(86.94)	32,221,567,818	41,434,515,298	(22.23)

Other comprehensive income to be reclassified to statement of profit or loss in subsequent periods

Net exchange differences on translation of foreign operations	802,877,112	504,173,570	59.25	21,805,237,936	600,145,650	3,533.32
Net other comprehensive income to be reclassified to state-
802,877,112	504,173,570	59.25	21,805,237,936	600,145,650	3,533.32
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	802,877,112	504,173,570	59.25	21,805,237,936	600,145,650	3,533.32
Total comprehensive income for the period, net of tax
3,813,822,395	23,557,077,433	(83.81)	54,026,805,754	42,034,660,948	28.53
Attributable to:
Equity holders of the parent	3,773,686,967	23,541,157,068		53,785,781,831	41,974,014,118
Non-controlling Interest	40,135,428	15,920,365		241,023,923	60,646,830
	3,813,822,395	23,557,077,433		54,026,805,754	42,034,660,948