Our pursuit of a consistent strategy and focus on sound fundamentals have allowed the Group to deliver a stable performance during the year under review.
Dear Shareholders,
Expolanka Holdings PLC has witnessed tremendous growth over the last several years, and it is with great pride that I address you as part of this dynamic group. What began as a family-owned enterprise has evolved into a global logistics powerhouse, propelled by our unwavering commitment to excellence and the tireless efforts of our dedicated team. Today, with a footprint in 39 countries across 4 continents, and more than 92% of our revenue derived through international markets, Expolanka’s phenomenal expansion has seen us reach the largest manufacturing and consumer markets in the world. Continuing this story of long-term growth, I present to you the annual report and financial statements of Expolanka Holdings PLC for the year ended 31 March 2023.
Resilience in the face of challenges
The global markets during this financial year presented numerous challenges, particularly in the last several months. The trade and logistics industry as a whole has seen a slowdown with factors such as retail overstocking, inflationary fears, reduced consumer spending, and geopolitical tensions contributing to a challenging operating environment. However, we view these challenges as short-term cyclical changes. Our pursuit of a consistent strategy and focus on sound fundamentals have allowed the Group to deliver a stable performance during the year under review.
Expolanka Holdings PLC has shown remarkable resilience during an exceptionally challenging period. During the fiscal year ended 31 March 2023, we achieved a revenue of Rs. 546 Bn. and a profit after tax of Rs. 31 Bn. The strength of our financial results can be attributed to the effective implementation of the Group’s long-term strategic plan. Additionally, our ability to remain agile and adaptable; expanding our customer base, enhancing our services, and building stronger partnerships across the Globe has contributed to this success. Furthermore, it is important to emphasise that our approach to business goes beyond these numbers, the Company’s holistic outlook encompasses the strength of our brand, the reliability of our governance framework and policies, and our long-standing commitment to sustainability. Each of these aspects have played a significant role in creating true value for our stakeholders.
A year of remarkable progress
Reinforcing our position as a leading global logistics player, our resilient performance can be attributed to the strength of our logistics sector, with the key driver being EFL Global. Successfully navigating a volatile and uncertain environment, our logistics sector achieved an overall revenue of Rs. 537 Bn. and a profit after tax of Rs. 29.4 Bn. for the year under review. EFL Global, having established itself as a top global logistics company, remains committed to building capabilities, infrastructure, systems, and processes that create sustainable value for our stakeholders.
Despite challenges, the business saw success from its core fundamentals, which reflects the continuity and consistency of EFL’s long term strategy. Our strategic investments and expansionary efforts over the last few years bore fruit during the year under review. Expanded service capabilities in both origin and destination markets, coupled with our foray into the contract and domestic logistics business, have contributed positively to performance.
In alignment with our long-term growth strategy, EFL Global successfully completed two significant acquisitions, which will not only expand the service portfolio and customer base, but also consolidate operations in North America whilst laying the foundation for future growth. These acquisitions mark the largest undertaken by our Group and clearly demonstrate our determination to continue growing even in challenging times. While the Company has traditionally experienced organic growth, today we are actively seeking inorganic opportunities that align strategically and financially with our long-term vision.
Also noteworthy is the performance of the Group’s leisure sector, where we significantly reorganised our portfolio during the last few years and made changes to a leaner operating model. Our efforts proved timely, as a resurgent leisure and tourism industry enabled the sector to achieve a record-breaking annual revenue of Rs. 3 Bn. Meanwhile, our investment sector revenue amounted to Rs. 6.5 Bn. for the financial year concluded.
A strong financial position for future growth
The Group’s focus on consolidation during the year saw significant efforts being directed toward improving cash flows and strengthening our financial position. We have successfully settled debt owed to our parent company, SG Holdings, and significantly reduced our short-term borrowings. By retaining our working capital centric operating model, we have been able to adjust and adapt to changes in the macro-environment. This approach continues to ensure our operations are optimised to support the Group’s growth trajectory.
Our strong cash flow generation enabled the Group to declare dividends of approximately Rs. 16 Bn. for the year under review. With the strength of improved working capital cycles and an excellent cash balance, we have been able to self-finance the majority of the investments and strategic acquisitions completed during the year. The strength of our balance sheet, coupled with the support of our parent company, place Expolanka in a strong position to fuel future growth requirements.
Robust corporate governance and risk management
As we have grown and expanded, our focus on sound corporate governance, compliance, and risk management have also evolved. We recognise the importance of continuously improving our governance framework and risk management capabilities. Alongside our growing geographic footprint, we comply with a series of local regulatory requirements, governance standards, and business best practices of the countries in which we operate. Our robust corporate governance and compliance framework also meets the requirements of our primary shareholder listed in Japan.
Expolanka has successfully implemented effective internal controls and resilient systems that safeguard our ability to create sustainable value for our shareholders in the long-term. The Board plays a key role in driving forward the Group’s corporate governance agenda, and is committed to strengthening an ethics-based culture of continuous improvement within our operations. During a challenging year with a rapidly changing macroenvironment, the Board of Directors, Board committees, and corporate management coordinated closely to navigate developments in the global business landscape, while continuously striving for improvement in all areas of governance.
Creating sustainable value for our stakeholders
Alongside our focus on consolidating business operations and positioning for future growth, we placed equal emphasis on enhancing our Environmental, Social and Governance (ESG) practices in accordance with our Group sustainability strategy. Social responsibility is enshrined in our ethos, abundant in our corporate culture, and practiced by our teams across the Globe.
During the year under review we took concerted efforts to minimise the environmental impact of operations as part of our broader goal of achieving net-zero emissions by 2050: working with our partners to explore new avenues to decarbonise the logistics supply chain; supporting our suppliers to meet social and environmental best practices; launching pioneering new facilities that are powered by renewable sources; adding renewable energy generation capacity and transitioning existing facilities to cleaner energy sources; and leading social change through EFL’s Global Goodness initiative. Our stations across the Globe took the lead in launching new community development projects, supporting the work of pioneering environmental groups, and continuing our commitment to the Global Goals through action and volunteerism.
Looking forward
We will continue to focus on our long-term journey; developing synergies and seizing opportunities to complement our core business and position us for future growth that aligns with recovery of the global economy. Recognising that business environments are constantly evolving, we remain committed to effectively align with market conditions, managing costs efficiently and expanding our core logistics business. While our US operation will continue to be our largest contributor, we will also explore strategic growth opportunities in other markets and trade lanes. By expanding our industry exposure, developing our customer portfolio, improving internal efficiency, and leveraging technology and sustainability to augment our operations, we aim to ensure consistent growth across the Group.
As we venture into a new phase, we have embraced technology and innovation as fundamental aspects of our business across all sectors. We continue to leverage essential tools to improve visibility, enhance processes, drive efficiencies, and elevate our service offerings to customers. We are confident in our ability to grow as a digitally-integrated global logistics company; positioning ourselves at the forefront of the industry.
Acknowledgements
As we reflect on a challenging year, I am keen to acknowledge initiatives undertaken to drive growth, while retaining focus on the bigger picture and continuing to deliver high returns to our shareholders. Our journey over the years and the performance delivered by Expolanka this past year, is a testament to the power of a concentrated and consistent strategy executed effectively and efficiently by our leadership team. I would like to express my heartfelt gratitude to the esteemed Board of Directors of Expolanka Group: despite the challenging market conditions we have faced, their exceptional resilience, commitment to excellence, and dedication to our organisation's vision and goals have been truly remarkable. I also extend my sincere gratitude to our shareholders for their unwavering trust and support. Looking ahead, we remain excited about the potential our business holds.
I would like to acknowledge the hard work and spirit demonstrated by the entire workforce across our network. Their dedication and loyalty have been defining factors in enabling the Group to grow from strength to strength and deliver impressive results.
Lastly, I would like to thank our esteemed customers: Your trust and loyalty have been instrumental in our achievements. We are committed to providing you with an exceptional experience that exceeds your expectations.
On behalf of the Board, I would like to express my sincere appreciation for your continued support and belief in Expolanka’s vision. Together, we will continue to embrace growth, navigate challenges, and deliver excellence.
Sincerely,
BOKUTO YAMAUCHI Non Executive Chairman, Expolanka Holdings PLC
30 June 2023