Sri Lankaâ€™s Expolanka December net down 20-pct
ECONOMYNEXT – Sri Lanka’s Expolanka Holdings said December 2016 quarter net profit fell 20% to Rs274 million from a year ago owing to a write down in passive investments and lower exchange gains with logistics suffering from reduced demand and lower margins.
Group sales went up 21% to Rs17.2 billion in the December 2016 quarter, according to interim results filed with the stock exchange.
Expolanka’s December quarter earnings per share were 14 cents, down from 18 cents the year before. The share was last traded Rs5.70.
For the nine months ended 31st December, EPS fell to 36 cents from 49 cents a year ago with net profit down 27% to Rs699 million while sales went up 15% to Rs48.3 billion.
Expolanka Holdings chief executive Hanif Yusoof said quarterly pre-tax profits dipped by 23% in comparison to the corresponding period in the previous financial year
This was “primarily due to a decline in other income including a write down in passive investments and a drop in exchange gains in FY 15/16,” Yusoof said in a note accompanying the accounts.
But the operating results (earnings before interest and tax) increased by 2% in comparison to previous year, he noted.
“The performance of the core sector logistics recorded a healthy quarterly growth of 24% in revenue at Rs14.8 billion against a backdrop of reduced demand and increased pressure on margins,” Yusoof said.
“Our Air and Ocean freight recorded double digit volume growth backed by new customer acquisitions,” he said.
“The core markets in India, Bangladesh and Sri Lanka recorded noteworthy performances fuelled by volume growth in the US and Europe trade lanes. As anticipated though, margins took a dip in the US trade lane when compared to the high level in the previous year.”
Far East businesses in Vietnam and Hong Kong recorded “notable performances” contributing to the overall growth, Yusoof said.
“However, our operations in Middle East & Africa performed below expectations due to market challenges and higher buying rates leading to a dip in margins.”
The group’s ventures business sector recorded a revenue of Rs1.1 billion during the quarter but the write down in passive investments affected profitability, Yusoof said.
“Efforts are being made to exit from these passive investments with value realization to the shareholders,” he said.
“The perishable segment had to encounter vulnerability partly due to volatile climatic conditions which prevailed during the year,” Yusoof also said. “The group is evaluating several proposals to achieve margin improvements.”
(COLOMBO, Feb 03 2017)