Financial Highlights


  • Logistics 95%
  • Investments 3%
  • Leisure 2%


  • Logistics 62%
  • Investments (25)%
  • Leisure 13%


LKR 103,246 MN


Gross Profit

LKR 19,183 MN



LKR 735 MN



LKR 280 MN



LKR (438) MN


Chairman's Message

We will focus on supporting our core businesses to make sure they are geared to serve their chosen markets. In doing so we will look to exercise greater attention in implementing our expansion plans to ensure we invest strategically in areas that present strong opportunities for growth.

Chairman's Message

Dear Stakeholders,

I take great pleasure in presenting the Annual Report and Financial statements of Expolanka Holdings PLC for the financial year ending 31st March 2020, a year in which we were able to make excellent headway in our expansion initiatives whilst we were also able to further consolidate our operations.

As a resilient, nimble and agile, organization, the Group was able to produce satisfactory results amidst the challenges in our immediate environment. The key to our continued progress, is the market positioning & value creation that we make for our business partners across Of each of our business’ operations. Our core freight business - EFL, which is now present in almost all key international trade routes, continued to carve out a niche as a highly sought-after bespoke freight operator in the world. This gives me reason to believe that we are on the right track with our expansion strategy to increase EFL’s global presence based on the potential, evident in each region. I am pleased to see that in our leisure sector too, the Classic brand continues to hold its position as the market leader in the corporate travel market, which again validates our decision to focus extensively on this niche space.

Governance And Stewardship

We continue to operate on the premise that good corporate governance is integral to the delivery of our strategy and creating sustainable long-term value for the benefit of the Group’s various stakeholders. The Board is committed to maintaining the highest standards of corporate governance at every level across the entire organization. While the Board remains firmly committed to continually review and update its governance frameworks as part of its ongoing improvement program, our most recent assessment did not indicate the need for any fundamental changes to governance and oversight frameworks in any of our businesses in the current financial year

Meanwhile, SG Holdings Global Pte Ltd - the Group’s Japan-based parent also has a stringent, detailed and rigorous governance framework which is on par with the requirements of a listed Company in Japan. It is the stated objective of the Expolanka Group to emulate, implement and follow the best standards and best practices which is implemented across SG Holdings Global Pte. Ltd, with relevance to our business operations. Specifically, we have voluntarily implemented the internal control mechanisms and financial reporting principles promulgated under Japan’s Financial instruments and exchange act which further affirms the integrity, transparency and credibility of all Expolanka Group financial disclosures.

Sustainability Best Practices

Sustainability goes hand in hand with our strategy and long-term commercial success. Our sustainability approach focuses on the most material issues for our business - the aspects that underpin our decisionmaking processes and drive every actionable initiative that we undertake. In recent years, our efforts have been further guided by the Group’s commitment to the UN Sustainability Development Goals (SDG’s).

In fact we have now come to view the SDG’s as a point of reference to continually reassess the way we manage our business, locally and globally and plays a key part in our overall strategy development framework. Premised on this, we have adopted a multi-pronged strategy to realign our business models to globally accepted management best practices.

We are also increasing our investment in innovation and technology and looking to collaborate with our stakeholders to improve economic, social and environmental outcomes for our various businesses as well as the wider community

An area we are particularly passionate about is the promotion of diversity and inclusion. It is ingrained in our DNA and cascades through into our work ethic. Given our global footprint, we have begun actively working to promote diversity and inclusion at every level, with special emphasis on improving the Group-wide gender balance. Reducing our emissions are another priority. In this regard, several of our key businesses have already taken action to transform their traditional work methods through digital mediums. Meanwhile our freight sector recently adopted the Global Logistics Emissions Council (GLEC) Framework, a globally accepted standard which enables logistics businesses to calculate and report their emissions across their multi-modal supply chain. Stemming from this, we have now started forging partnerships to create positive impact through our activities and supply chains.

In the current financial year, the Group also took some notable action to advance its commitment to the SDG’s, specifically Clean Water and Sanitation. In July 2019 we launched the first phase of the EFL Global Goodness Project, an ambitious initiative aimed at providing access to clean drinking water to underprivileged communities in Country’s where the Group is present. We also launched a long- term initiative in support of Life on Land by undertaking to increase the forest cover within the Bundala



National Park (Sri-Lanka) as part of biodiversity restoration programme launched by the Department of Wildlife. Our commitment is to plant 25,000 trees annually over the next five years, which we hope will help to restore the biodiversity and natural habitats destroyed by two invasive alien plant species that have overrun almost 600 acres of park land since 2018.

Outlook And Prospects

Looking to the future, I expect the Group strategy to remain largely consistent. We will focus on supporting our core businesses to make sure they are geared to serve their chosen markets. In doing so we will look to exercise greater attention in implementing our expansion plans to ensure we invest strategically in areas that present strong opportunities for growth.

At the same time, it is vital that we improve the Group’s readiness to face what would be the “new normal” in the post-COVID era. I am confident that the work we have put in over the years will solidify our position in our respective markets and give the Group a firm footing from which to tackle the challenges going forward.

Board Changes

Three Directors; Mr. Yoshifumi Matsubara who served as an Executive, Non-Independent Director and Mr. Motonori Matsuzono who served in the capacity of a Non-Executive, Non-Independent Director and myself as the Chairman of the Expolanka Group, stepped down from the Expolanka Group Board with effect from 30 June 2020. I thank my two colleagues for their loyal service to the Group and wish them well in their future endeavors.

The three vacancies thus created were filled by Mr. Hitoshi Kanahori, Mr. Ha Yo and Mr. Mr. Akira Oyama, all of whom were appointed to the Expolanka Group Board as Directors with effect from 01 July 2020. I take this opportunity to welcome them all to the Board.


During my tenure on the Board, the Group’s profile changed rapidly and is on a sustainable platform with the ability to expand and grow in value along with the Board leading the charge. As I come to the end of my 3-year tenure as Chairman of the Expolanka Group, I wish to extend my appreciation to my fellow Directors on the Expolanka Holdings PLC Board for dedicating their time and expertise over the years. There can be no doubt that it is their continuous drive and application of their business acumen that has enabled the Group to remain successful. I also wish to extend a warm welcome to Mr. Hitoshi Kanahori to whom I will be handing over the reigns as Chairman with effect from 01 July 2020

I take this opportunity to also acknowledge our 2,900+ employees across the world for their diligence and exceptional commitment towards the Group. I am deeply honored to have been a part of your team for the past 6 years

Finally, to our clients and shareholders, thank you for your ongoing support. It was our pleasure and privilege to serve you. We look forward to working together and forging mutually beneficial and long-term relationships with you as we move ahead with our plans for the future.

Naosuke Kawasaki Chairman

Group CEO’s Review

A focused customer acquisition strategy followed by the Group continued to produce excellent results enabling us to increase our reach in existing markets as well as break into new customer verticals.

Group CEO’s Review

Dear Stakeholders,

As we look back at the Financial Year 2019/20, an year which has been challenging for the most part, I’m happy to state that Expolanka Holdings PLC continued to make steady progress in our business operations. I believe these results, are a testament to the strength and stability of the Group’s core foundations, the resilience of its people and the focus and attention directed towards achieving its strategy

Globally we witnessed a marked slowdown in trade activity throughout 2019 as the anticipated pickup failed to materialize amidst the escalation in US-China trade tensions. Sri Lanka had its own set of challenges as the economy experienced a significant short term impact from the unfortunate events on Easter Sunday. We concluded the financial year amidst the COVID-19 pandemic with no visibility in sight on the socio-economic consequences for the foreseeable future.


The Group’s core logistics business, under the flagship EFL brand, registered promising results in the year under review. At a time when the global freight industry came under pressure due to an extended period of volume contraction, EFL’s global volumes remained stable during the year. Reviewing the trade lane performance, the Group continued to see encouraging progress on the Trans Pacific Trade lane whilst maintaining its position in the Indian Sub-Continent operations. The Far East operations too performed satisfactorily during the year, despite all the challenges. Our relentless focus on optimizing customer performance enabled us to retain our market positions. A focused customer acquisition strategy followed by the Group continued to produce excellent results enabling us to increase our reach in existing markets as well as break into new customer verticals. We were able to secure several new strategic customers gaining traction in the technology, automotive, pharmaceutical and perishable verticals. We were able to leverage on EFL’s strong ground presence in East Asia to tap into the higher cargo flows originating from regional economies which appeared to be benefitting from the strained US-China trade relations.

Meanwhile in the midst of yield volatility caused by price fluctuations and capacity challenges in the global freight industry, we mobilized to consolidate EFL’s air freight operations, while applying yield management strategies to safeguard margins in the sea freight operation. Reinforced by these efforts, EFL recorded a 7% year-on-year increase in gross profits and ended the year with a recurring operating profit of Rs. 2.1 billion excluding the one-time legal settlement and relevant fees thereon. One of the key developments during the year was the decision the Group took to resolve the legal dispute with RCS Logistics, where a full and final payment of USD 6.75 million was made without the acceptance of any liability. This decision was taken with a view to enable EFL to focus on its core business operations, expansion initiatives and expedite the implementation of the company’s key strategic objectives.

Taking steps to expand EFL’s global reach, new operations were set up in Denmark and a strategic acquisition was made in Belgium, adding considerable boost to our bandwidth in the European region. EFL was also established an operation in Taiwan, which has enabled the company to optimize its presence in the East Asia market and take advantage of the opportunities in the vibrant and growth-oriented region. The market expansion initiatives were undertaken after careful consideration in order to implement our strategic initiatives accordingly.

The Group also made headway in the implementation of our planned digitization initiatives for the logistics sector, where we completed the implementation of the ERP platform across the network. We are now looking to leverage on the ERP platform to drive greater efficiency across our global logistics management model.

The Group’s leisure sector too performed satisfactorily in 2019/20. The Corporate travel segment, which accounts for a larger portion of the leisure sector operation performed as per expectations despite increasing competitive pressure.

However, the leisure sector was unable to overcome negative headwinds in its Inbound and Vacation segments. Both segments suffered due to the slowdown in tourist arrivals after the Easter Sunday attacks in April 2019. The closure of the airport following the COVID-19 pandemic in March 2020 also had a bearing on inbound travel in the last few weeks of the financial year.

The strategy for the Group’s Investment sector in 2019/20 was much the same as in the last few years. Continuous reassessment of the sector portfolio was carried out with the aim of driving operational and cost efficiencies for the sector’s key business segments - the Group’s export operations and ITX 360, the Group’s IT arm.






Having made a commitment to the UN Sustainability Development Goals (SDG’s) in 2018, we made some important strides in advancing our sustainability agenda in the year under review. We launched several major projects under the Global Goodness initiative. Some of them are long-term undertakings which will underpin the Group’s contribution to Clean Water and Sanitation, and the ‘Revive Bundala Project’ which is a significant step in our efforts to support Life on Land.


The fight against COVID-19 has also presented EFL with an opportunity to move higher volumes of Personal Protective Equipment (PPE) cargo. Furthermore, the fact that EFL was able to offer an uninterrupted service to all customers despite COVID-19 lockdown restrictions, will no doubt hold the company in a good position as we continue to focus on reinforcing our key markets around the world and optimize business operations by diversifying into different verticals and markets. The negative impact to the Group was greatly mitigated by continuing to be nimble and agile and pursuing available opportunities aggressively. In addition, the Group also undertook several short-term cost containment initiatives which further enabled the organization to overcome the challenges posed.

With the COVID-19 pandemic still evolving, it is difficult to predict the impact on the leisure sector. I am hopeful however that if the travel bans and other restrictions are lifted in the coming months, it will help the Corporate travel segment to normalize by early 2021.

In the Group’s investment sector, specifically the export operation continued to function in a volatile operating environment due to lockdown restrictions which were stringent in its key export markets. Our focus here has been to improve liquidity and manage costs.

Expolanka Group will continue to stay agile managing the potential impact of the COVID-19 outbreak on our global and local business operations, while continuing to serve all our customers in the most efficient and effective manner. Our priorities will be to maintain the health & safety of all our employees, while strengthening the core business.


As we enter the new Financial Year with expected easing of lockdown restrictions in each of our global locations we will align our operations in the most efficient, effective and agile manner to provide services to our customers and business partners.


I wish to express my sincere thanks to the Chairman and the Board of Directors of Expolanka Holdings PLC for their unfailing support and guidance at all times. I would also like to take this opportunity to thank our outgoing Chairman, Mr. Naosuke Kawasaki, who has been at the helm for the past 6 years. His support has been a source of strength to us all these past few years. A warm welcome to our incoming Chairman, Mr. Hitoshi Kanahori, who will lead the Expolanka Group Board from 01 July 2020.

Let me also place on record my appreciation for services rendered by Mr. Yoshifumi Matsubara and Mr. Motonori Matsuzono, who resigned from the Board from 30 June 2020. I wish to welcome Mr. Ha Yo and Mr. Akira Oyama who will join the Board from 01 July 2020.

My sincere appreciation goes to our parent, SG Holdings Global Pte Ltd, for their steadfast support over the years. The commitment they have shown towards the Expolanka Group continues to inspire us to reach for new heights in the years to come.

I wish to extend my heartfelt gratitude to the Expolanka team around the world for their commitment and dedication at all times. My heartfelt gratitude also goes to our shareholders. I am immensely grateful for your continued support and confidence. Finally, I wish to thank the customers, business partners and other stakeholders of the Group for their continued patronage. I look forward to your support in the coming years as well.

Hanif Yusoof Group CEO

Group Performance

Group Performance

2019/20 2018/19 Change
Revenue 103,245,670,750 95,454,911,468 8%
Gross Profit 19,182,682,747 18,099,589,502 6%
EBIT 735,423,582 3,312,929,114 -78%
Finance Charges (455,321,573) (239,693,976) 90%
Profit for the year (437,936,347) 1,908,844,832 -123%
ROCE 0.07% 10.17%
ROE -3.41% 12.09%

Group Strategy

Having completed a comprehensive restructuring exercise in 2015, the Expolanka Group strategy has since been firmly anchored to its two core businesses - logistics and travel. The Group’s strategy for the medium to long term would continue to focus on scaling up the logistics operation to boost EFL’s profile as a fully fledged logistics solutions provider with a strong global reach, alongside efforts to further strengthen the Group’s leisure brand “Classic Travel”. As part of this overall strategy, the Group will remain open to pursuing both organic and inorganic growth opportunities for EFL and Classic Travel.

Moreover to ensure the focus remains strictly on logistics and travel businesses, the Group will seek to further rationalize its portfolio over the next few years, which may often require divesting from peripheral, non-core businesses that do not complement the Group’s broader vision for the future.

Group Strategy

Sustainability Strategy

Expolanka Group Sustainability Strategy

The Expolanka Group sustainability strategy has been developed in line with the Group’s vision for the future and also to accommodate the UN SDG expectations from corporates. Our key objective is to ensure sustained and sustainable value creation for all stakeholders through greater accountability, not only towards financial growth, but also towards the environment and wider society. The Group vision is cascaded down to all the companies in the Expolanka Group and is also operationalised at all operational locations through a framework of strategic drivers

As our core business and the largest economic entity within the Expolanka Group with a growing global footprint, EFL plays a key role in operationalising our sustainability strategy. Therefore, the sustainability focus for the financial year was to operationalise SDG’s at different EFL locations while responding better to customer perceptions and expectations of sustainability.

Following an in-depth study to identify what customers consider as material sustainability issues for their freight partner, the EFL materiality map was reconstituted, with a stronger stakeholder and sustainable growth perspective.

SECTORS | Logistics

Product Mix Highlights 2019/20 Strategy
  • Air Freight
  • Sea Freight
  • Logistics
  • Warehousing
  • Transportation
  • General Sales Agents (GSA)
  • Strong Growth in new customers
  • Expanding operations in all trade lanes
  • Full deployment of the ERP system
  • Further value additions to customers
  • Expansion in to Europe and Taiwan
  • Harness technology solutions for business expansion
  • Expand existing customer wallet share
  • Acquire new customers
  • Diversify by expanding our vertical portfolio
  • Optimise Supply chain
  • Optimise trade lane performance to drive profitability


  • 100,000
  • 80,000
  • 60,000
  • 40,000
  • 20,000


  • 4,000
  • 3,500
  • 3,000
  • 2,500
  • 2,000
  • 1,500
  • 1,000
  • 500
  • (500)
  • EBIT
  • Profit for the Year

EFL’s footprint has expanded rapidly across the Indian sub continent over the past decade, making EFL one of the fastest growing logistics operators in South Asia. Since 2015, EFL has been on an accelerated growth trajectory to increase its global bandwidth. Today EFL footprint extends to 23 Countries where 60+ origin stations offer trade connectivity across all major global lanes allowing consumer markets in the US and Europe to seamlessly connect to manufacturing centres in Asia, Africa and the Middle- Eastern regions. As a global organization, EFL’s operations are responsible for providing direct employment to 2,417 people around the world, while contributing indirectly towards the livelihood of thousands more across the logistics value chain.

Logistics Sector

Freight Operation

EFL continued its positive growth trend recording a stable and resilient performance across all its business verticals, in a particularly challenging year for the global freight industry. This was a result of EFL adopting and pursuing a consistent strategy with focused initiatives and executing clear plans, particularly in relevance to its investments in USA, which is now starting to generate desired returns for the Group.

An unusually volatile external environment posed challenges to the overall freight forwarding industry in 2019/20. The key factors include Trade disruptions due to US-China trade tensions which impacted cargo movements causing widespread market uncertainty. Muted GDP growth in manufacturing-intensive economies, ambiguity surrounding BREXIT and the COVID-19 outbreak in February / March 2020 also further contributed towards the volatility. In this backdrop global freight volumes contracted notably, raising concerns regarding excess capacity in both ocean and air fright segments. As a direct consequence of the drop in global volumes Air Freight rates saw a decline right throughout the year.

EFL too was impacted by these challenges. Nonetheless, quick action taken to optimize the performance of both air and sea freight operations allowed EFL to safeguard its position. Tactical measures to consolidate the airfreight operations helped to stabilize the operation, while increased focus on growing the Ocean freight operation resulted in significantly higher volumes in this segment across all trade lanes.

Meanwhile with margins under pressure due to declining freight rates, proactive yield management measures were implemented to protect margins. Steps were also taken to strengthen relations with all major existing carriers, while building ties with new carriers to ensure capacity availability and maintain the optimum mix in terms of contracted capacity.

In parallel, EFL continued to pursue its front-end growth strategy to focus on diversifying the client mix using aggressive customer acquisition strategies to tap into selected client verticals. As a result of these efforts, EFL was able to increase the concentration on a variety of verticals such as Tech, Pharma and Perishables. Alongside efforts to grow the other verticals, visible positive strides were made on the core apparel business as well, by maintaining wallet share of existing customers and attracting new strategic accounts into the portfolio. Further staying vigilant regarding potential growth opportunities, EFL quickly leveraged its strong East Asian presence to tap into the higher cargo flows originating from other Asian economies, which appeared to be benefitting from the fallout of US-China trade relations. Whilst COVID-19 impacted the performance of the Sector, particularly in the last Quarter, EFL pursued opportunities to optimise business for the new financial year.

In the meantime, the global expansion strategy was also accelerated to strengthen EFL’s ground presence in selected geographies. New origin stations were established in Netherlands, Denmark and Belgium as part of the European expansion strategy. The main aim here was to consolidate EFL’s presence and optimise performance in this market, while creating a platform to penetrate into a wider portfolio of verticals. Furthermore the new station set up in Taiwan is aimed at enhancing EFL’s position in the Far Eastern markets. These new additions bring EFL’s global network to 23 as at end-March 2020.

From a trade lane perspective, the Transpacific operation continued to grow and saw a steady increase in its numbers during the year due to EFL’s concentrated efforts in growing business and securing more accounts. Meanwhile the Indian subcontinent operation too posted encouraging numbers despite the drop in overall trading volumes within the region.

In other developments, EFL made steady progress in its digitization agenda, which is aimed at supporting EFL to scale up operations to compete on a broader level and move quickly to take advantage of potential opportunities in the market, ultimately enhancing its global positioning as a strategic supply chain partner to its customers. The main initiative for 2019/20 was the completion of the rollout of Cargowise ERP across the EFL network to create a uniformed platform that enables all stations across the Group to adopt standardized processes to enhance visibility and transparency as well as improve operational efficiencies and drive scale as needed.

Further as an enabler of the front-end logistics management, Cargowise increases EFL’s ability to offer comprehensive end-to-end track and trace visibility to customers. Moreover Cargowise is designed to allow EFL to seamlessly integrate with customer operations thus enabling greater intimacy and customer centricity which would ultimately deliver long term sustainable advantage to EFL’s relationship with its customers.

3PL Operation

The Group’s 3PL operations consist of both the Warehousing and Transport businesses. Continuing its successful approach of adopting a light asset model for the warehouse operation, EFL continues to drive growth in this segment by leveraging on its inherent expertise and optimizing business efficiencies. With the focused concentration on specific targeted customers, value added solutions, extending in to varied supply chain services, the 3PL operation has been able to transform itself to become an important growth driver for Group.

Moreover continued investments and deployment of cutting-edge technology has greatly enhanced the level of service, efficiency and visibility offered to the customer.

The 3PL operation saw continued growth during the year under review with increased capacities which further resulted in the company commissioning a new customer fulfillment center of approx. 80,000 sq ft increasing the current warehousing capacity in Sri Lanka to approx. 540,000 sq.ft.

Ongoing value additions of this nature have resulted in higher efficiency, utilization and yields enabling the 3PL operation to grow consistently over the last 3 years in terms of revenue, profitability, and scale

Financial Results

The Logistics sector performed reasonably well in the year under review to record Revenue growth of 9% year-on-year, a commendable achievement given the uncertainty in global freight markets. While a majority of EFL’s origin stations performed as per expectations, a few did fall short on their annual targets as a result of reduced volumes from their respective markets.

A combination of higher revenue and margin management measures drove up Gross Profits by 7% over the previous year, while the GP Margin was 18.1% in the current financial year.

Adding to the incremental cost for the year is the full and final payment of USD 6.75 million, made to RCS Logistics Inc. USA to conclude a dispute between the said organization, Expolanka Holdings PLC and Expolanka USA LLC (a fully-owned subsidiary of Expolanka Holdings PLC). As previously disclosed in Expolanka Holdings PLC’s Annual Reports and interim financials, RCS Logistics Inc had filed action against Expolanka USA LLC and Expolanka Holdings PLC, claiming damages on account of several of its employees leaving the employment of RCS Logistics Inc to join Expolanka USA LLC. The case which has been ongoing since June 2017 was resolved in September 2019 following the decision reached at a mediation hearing held in the state of New Jersey USA, where it was resolved that the dispute would be concluded on the basis that EFL would make a full and final payment of USD 6.75 million without the acceptance of any liability

Overheads increased by 18% year-on-year due to competency building initiatives to strengthen strategic areas, (APAC and USA), as well as the expenses incurred on building long term competency across the Asia Pacific operations. Other factors such as the depreciation of the Rupee against the US Dollar as well as natural inflationary pressures were partly responsible for the increase in recurring overheads.

Despite significantly higher costs, the Logistics sector was able to record recurring Operating Profits of Rs. 2 billion in 2019/20.

Focus For The Future

The prospects for the year ahead remain uncertain, especially as it is quite likely that the economic fallout from the COVID-19 pandemic will be difficult to assess. However as a nimble, flexible and progressive entity, EFL will take relevant steps to mitigate the short term impact of COVID 19, and come out stronger as an organization. Therefore in the short term it is imperative that EFL keeps a keen eye on emerging business opportunities that may arise due to disruptions in global supply chains and inherent sourcing difficulties caused by the COVID-19 pandemic. Enhancement of procurement capabilities and short-term overhead mitigation initiatives will be the other major focus areas in the coming months.

Improving medium term readiness will be another key priority. This means gearing up for the likely rebound in economic activity over the next 12 – 18 months. Going forward EFL will look to grow market share by consolidating long-standing markets and firming up its position in newly established segments, while prudently seeking out emerging opportunities. New customer acquisition and higher wallet share of existing customers will underpin EFL’s business expansion plans in the years ahead. Improving the customer mix, while maintaining a keen eye on customer performance will also be key priorities. This would require expanding EFL’s portfolio of services to offer fully integrated end-to-end logistics solutions. Technology will be a key part of this effort, both in terms of improving efficiency and enhancing customer intimacy. Efficiency will enable support scalability in a more efficient manner, while customer intimacy will help raise EFL’s service fulfillment levels on par with global standards.

Logistics 2019/20 2018/19 % Change
Revenue 98,695 90,953 9%
Earnings Before Interest & Taxes (EBIT) 927 3,472 -73%
Finance Cost 332 162 105%
Profit Before Tax 594 3,311 -82%
Profit After Tax (90) 2,207 -104%
Total Assets 32,285 29,366 10%
Total Equity 11,474 14,262 -20%
Total Debt 10,211 3,411 199%
Capital Employed 21,685 17,674 23%
Return on Equity -0.8% 15.5% -105%
Return on Capital Employed 1.1% 13.4% -92%

Turnover 96%

EBIT 126%

Capital Employed 87%

SECTORS | Leisure

Product Mix Highlights 2019/20 Strategy
  • Outbound Corporate Travel & Leisure
  • Inbound Leisure and Corporate Travel
  • Destination Management Services
  • New customer acquisition
  • Expanding operating base and reach
  • New New products and services
  • Increase value added service portfolio
  • Continued brand enhancement
  • Expand from outbound to full service provider for B2B category
  • Explore market expansion initiatives
  • Expand business volumes
  • Improve cross selling opportunities.


  • 1,600
  • 1,400
  • 1,200
  • 1,000
  • 800
  • 600
  • 400
  • 200


  • 350
  • 300
  • 250
  • 200
  • 150
  • 100
  • 50
  • EBIT
  • Profit for the Year

Classic Travel, which represents the Group’s leisure sector operation was established in 1994. Almost thirty years on, Classic Travel has grown steadily to carve out a niche as the premier corporate travel agency in Sri Lanka servicing a majority of the Country’s top blue chip companies. Leveraging on its expertise in the corporate travel segment, Classic Travel has over the years diversified into other areas of the travel value chain, including MICE travel, destination management, as well as the new global trend favoring experiential travel.

Leisure Sector

The Group’s Leisure sector consists of several businesses along the travel industry value chain. Among these, the largest contributor to the sector is the corporate travel business, which is managed under the brand name “Classic Travel”. Specializing in providing end-to-end travel solutions for corporates, ranging from the issuance of Air tickets to visa handling services, hotel bookings, insurance and a variety of other requirements, “Classic Travel” has continued to differentiate itself from peers in the market, by offering superior USP that includes world-class service standards. On this basis, “Classic Travel” has succeeded in capturing a significant portion of the corporate travel market and today is widely accepted as the market leader in this space. Over the years, the Company has ventured into other segments of the travel value chain, including outbound leisure travel services, inbound services and experiential travel services. Leveraging on its credentials and market leading position, the Company has also developed strong relationship with its partner network (Airlines, Hotels and other suppliers), allowing it to expand its range of services to cater to travel preferences varying from mainstream to the top end niche traveler.

The core business - the corporate travel segment performed satisfactorily in the year under review under challenging circumstances. The industry took an impact from Easter Sunday incident which led to a drop in business for a period of time. However, the Company was quick to capitalize on the resumption of normal travel activity from about June 2019. In order to achieve its volume targets for the year, the Company leveraged on its fullyfledged service proposition to drive new customer acquisition, while taking steps to expand the bandwidth among existing customers as well. As part of the ongoing effort to differentiate the “Classic” corporate offering, several new services were introduced in the current financial year to augment the existing service model, most notably the airport concierge service that ensures a hassle free check-in for outbound travelers. However just as it appeared that these measures were paying off, the COVID-19 outbreak in the latter part of the financial year resulted in negative impact for the corporate travel business, as all outbound travel ceased following the shutdown of the airport in mid-March 2020.

Meanwhile effective margin management within the corporate travel segment remained a key priority, especially given the stiff market competition and the margin pressure caused by policy changes by airlines. Taking a long term view towards margin management, the Company began looking into the possibility of value added technology solutions that will not only improve internal efficiency and drive cost benefits in the long run, but also enhance service delivery to the customer.

2019/20 was quite a challenging year for the Company’s inbound and destination management operation. The first half of the current financial year was particularly tough as tourist arrivals to the Country fell drastically after the Easter attacks in April 2019. Taking necessary steps to overcome the difficulties facing this segment, the focus shifted towards developing a wider range of experiential travel solutions to cater to both mainstream and niche travelers. Backed by these efforts the inbound operation showed signs of picking up from Q3, but any real progress was again thwarted by the COVID-19 outbreak in February / March 2020 which brought international travel to a grinding halt amidst lockdowns and travel bans imposed by most countries across the world.

Despite the challenges in both outbound and inbound operations, the Leisure sector tabled a satisfactory performance in 20219/20, with the Company recording Revenue of Rs. 1.26 Bn.


The focus for the immediate future will be to manage the impact of COVID-19 on the Leisure sector business operations. Efforts in this regard have already commenced with certain businesses being restructured to drive short term overhead reductions and enable the sector to ride out the difficult times. As an immediate measure to reduce costs, it was decided that staff incentive payments be made on the basis of variable pay. Meanwhile, other businesses that appear to be less sensitive to the COVID-19 impact will be positioned to expand and grow over the coming months.

In the long term, the Leisure sector will continue to operate on the basis of successful strategy of creating value through differentiation. In this regard, the Company expects to leverage its existing relationship with customers to provide more services across its value chain.

The Company will also look to become more connected with customers through the use of technology specifically by enhancing its CRM platforms and develop solutions to meet the needs and requirements of customers. Diversifying the customer portfolio will also be another key priority. While at present the majority of Classic clients are in the Tech & Apparel Industries, the Company aims to expand its footprint to a wider customer circle as part of its medium term strategy.

Leisure 2019/20 2018/19 % Change
Revenue 1,262 1,375 -8%
Earnings Before Interest & Taxes (EBIT) 187 303 -38%
Finance Cost 47 25 90%
Profit Before Tax 140 279 -50%
Profit After Tax 110 208 -47%
Total Assets 1,272 1,769 -28%
Total Equity 731 734 0%
Total Debt 263 429 -39%
Capital Employed 994 1,164 -15%
Return on Equity 15.0% 28.4% -47%
Return on Capital Employed 15.8% 20.1% -21%

Turnover 1%

EBIT 25%

Capital Employed 4%

SECTORS | Investments

Product Mix Highlights 2019/20 Strategy
  • Export of
    • Desiccated coconut
    • Selected fruits and vegetables
  • Value added processing
  • IT Solutions
  • Processing plant being fully commissioned and operationalized
  • Built strong relationships & partnerships with Global IT players
  • Consolidate multi sector sourcing model for coconut.
  • Re-organise organic fruit operations to reduce risk concentration
  • Enhance value adding activities
  • Corporate office enhanced its governance framework
  • Optimise operation with enhanced business model
  • Consolidate value added process operation
  • Confine restructure of non-core investments.


  • 4,000
  • 3,500
  • 3,000
  • 2,500
  • 2,000
  • 1,500
  • 1,000
  • 500


  • (100)
  • (200)
  • (300)
  • (400)
  • (500)
  • (600)
  • EBIT
  • Profit for the Year

The investment sector consists mainly of businesses that provide support for the Group’s core operations. These include the shared serves that come under the Corporate office and the IT business. in addition, the Group’s export arm also comes under the Investment sector

The group’s investment sector consists of four businesses, namely Export of fresh produce, Value added organic exports, Technology services & the corporate office. The strategy of the group for the sector during the financial year was much the same as it was over the last several years which was centered on stabilizing the performance of the various entities and businesses of the sector

From an overall basis, the Investment sector recorded a growth in revenue of +5% YoY, generating a revenue of Rs. 3.2BN for the year, which was primarily a result of the continued performance of its primary Dessicated coconut export operation. The business performed satisfactorily during the year and was augmented by the cross border trading operation initiated by the company.

The Value added Organic export operations of the company, which primarily exports coconut water, organic dried fruits etc, too had its first year of full and stable operations. With the processing plant being fully commissioned and operationalized, the company is quietly confident in relation to the growth prospects of the business operation.

The business focuses primarily on the US & European markets and continued to gain transaction during the year, contributing a healthy revenue.

A slow-down in operation due to Covid 19 was felt during the latter part of the financial year, however the operation continued to close the year with positive returns.

Furthermore, a continuous reassessment of the sector portfolio was carried out with the aim of driving operational and cost efficiencies, which led to the fresh produce export business being further streamlined in the year under review.

ITX 360, the Group’s IT operation continued to meet its primary obligations in supporting the Group’s strategic objectives by providing specialized technical support services for the logistics, leisure and investment sector companies in aiding the key operations of the company to drive its strategies and objectives. Furthermore, the company looked to leverage on its strong relationships & partnerships with leading players in the global market. Furthermore, the company looked to leverage on its strong relationships & partnerships with leading players in the global IT industry, to make inroads into the commercial IT market by securing several external sales opportunities by providing value added services to its customers.

Whilst facilitating the continued growth of the organization and facilitating the strategy for future expansion, the corporate office enhanced its focus on improving the overall governance framework of the organization and driving key strategic initiatives across the group.

Investments 2019/20 2018/19 % Change
Revenue 3,289 3,126 5%
Earnings Before Interest & Taxes (EBIT) (379) (463) -18%
Finance Cost 75 53 42%
Profit Before Tax (454) (516) -12%
Profit After Tax (458) (506) -10%
Total Assets 2,466 2,462 0%
Total Equity 626 791 -21%
Total Debt 1,722 1,491 16%
Capital Employed 2,348 2,282 3%
Return on Equity -73.2% -64.1% 14%
Return on Capital Employed -16.3% -19.9% -18%

Turnover 3%

EBIT (52)%

Capital Employed 9%