Sri Lankaâ€™s Expolanka Sept net down 39-pct
ECONOMYNEXT – Sri Lanka’s Expolanka Holdings PLC said September 2016 quarter group net profit fell 39 percent to Rs243 million from a year ago largely owing to a write-down in its investment portfolio because of the stock market slump.
Sales of the group rose 17 percent to Rs16.2 billion over the period, according to interim results filed with the stock exchange.
Earnings per share for the quarter were 12 cents.
For the six months ending 30 September 2016, EPS was 22 cents, with net profit down 31 percent to Rs425 million although sales went up 12 percent to Rs31 billion.
The accounts showed profits from Expolanka’s core logistics business were up only 3 percent to Rs842 million, with sales up 10 percent to Rs26 billion.
The group’s leisure profits fell 8 percent to Rs94 million, although sales shot up 59 percent to almost Rs3 billion.
Expolanka Holdings chief executive Hanif Yusoof said profits fell “primarily due to a decline in other income resulting from a write down in passive investments held at the group level, alongside a more significant drop in exchange gains in comparison to the previous year.”
The write down in passive investments affected the profitability of the group’s venture business sector.
“The depressed stock market along with low liquidity in some of the stocks has resulted in a drop in share prices, affecting our investment value,” Yusoof said. “We are currently exploring possibilities for an exit from this passive investment with an appropriate value realisation to shareholders.”
Yusoof said the core sector logistics recorded an “encouraging” growth of 15 percent in revenue in the second quarter.
“Both air and ocean freight recorded double-digit volume growth for the year,” he said. “As anticipated, margins took a dip in the US trade lane and corrected to a more sustainable level when compared to the high level in the previous year.”
The group’s core markets in India, Bangladesh and Sri Lanka performed well, fueled by healthy volume growth in the US trade lane and a recovery in business from the Europe trade lane.
Yusoof said Expolanka was planning to sell its Indian outbound travel business.
“The Indian outbound had a challenging period on margins with higher cost increases than anticipated,” he said. “The Group has already entered into a memorandum of understanding to explore an exit from this business given the outlook. However, as part of our strategy, we will continue to focus on increasing our value propositions within the leisure sector.” (COLOMBO, Nov 08, 2016)