Integrated Annual Report 2022/23

1/ Sound Capital Structure and Financial Performance

Expolanka Group delivered a stable performance in FY 2022/23, despite soft market conditions impacting global trade and the logistics sector.

Financial indicators

Group performance

  • Soft market conditions and subdued trade and logistics sector
  • Performance impacted by currency fluctuation
  • Stable revenue and increased wallet share despite challenges
  • Demonstrated quality of earnings resulting in improved cash flow position
  • Maintained stable overheads in USD terms
  • Focused on consolidation with a long-term focus
  • Funded strategic acquisitions focused on future growth


The Group posted a revenue of Rs. 546 Bn., down 21% from the previous year. This is a result of a normalization of freight rates and reduction in volumes across both air & ocean freight due to the challenging macro economic environment.

The global logistics sector experienced a moderation in volumes during the year, owing to a downswing in demand. Key factors impacting, included Inventory overstocking by retailers and inflationary impact on consumer spending in our primary markets of North America, and macro-economic pressures due to protracted geopolitical tensions and uncertainty surrounding the recovery pace of the global economy.

Freight rates that had reached supra-normal levels during the previous year, primarily due to global supply chain disruptions, normalised during FY 2023; resulting in a direct impact on yield and revenue for the Group.

Despite reduction in value and volumes, the Group’s flagship business, EFL Global, put up a sterling performance as a result of increased wallet-share and volume-share with key customers and increase in new strategic accounts with strong growth potential.

As a leading global logistics player, 98.4% of the Group’s revenue came from our core business segment, which displayed resilience in the face of a global slowdown.The Group’s leisure business showed notable growth: with an exceptional performance in FY 2023 due to proactive steps taken to right-size the business and realign the portfolio. The Group’s investment sector also posted a stable performance during the year under review.

With 92% of our Revenue and 73% of our PAT derived from international markets, Expolanka continues to demonstrate the international reach of the business.


Driven by smart procurement strategies, close relationship-building with partners, a lean operating model, and efficient operations; the Group posted a Gross Profit of Rs. 105 Bn., Earnings Before Interest and Tax (EBIT) of Rs. 39.6 Bn., and a Profit After Tax (PAT) of Rs. 31 Bn. during the year under review.

The Group’s performance was negatively impacted by currency fluctuations. In particular, appreciation of the Sri Lankan Rupee against the US Dollar during the latter end of the year under review, led to the Group recording a Rs. 2.3 Bn. exchange loss.

Despite challenging conditions, the GP Margin grew to 19.3% during the year under review, testament to the strength and continuity of the Group’s long-term strategy, strength of internal processes, and efficiency of key investments.

Similarly, with overheads pegged to the dollar, on a reporting currency basis, the Group’s overheads grew by 63%. However, in real terms, overheads increased by 12%. aligned with the Group’s business model and reduced volumes experienced during the year under review.

The variable nature of the overheads enabled the group to maintain profitability despite reduction in Revenue and Gross Profit, thereby mitigating the negative impacts of the macroeconomic environment.

The Group maintained its track record of strong returns beyond industry averages, with Rs. 15.88 Earnings per Share (EPS), Trailing Twelve Months (TTM) Return on Equity (ROE) of 22.67%, and TTM Return on Capital Employed (ROCE) of 16.14% during the period under review.

Optimised capital structure

Expolanka maintains an optimal capital structure that strikes a balance between equity and debt. The year under review saw a growth in Total Equity by 20.3% to reach Rs. 150 Bn.

Debtor-levels declined more than proportionally during the year, while efficiency in cashflow was improved significantly; resulting in settling Rs. 89 Bn. of short-term debt. The Group closed FY 2023 with greatly reduced debt liabilities. Throughout, we remain committed to proactive and diligent management of working capital, which is our greatest asset.

Culmination of timely and strategic investments during the past years have enabled Expolanka to develop infrastructure, capabilities, and network with a focus on continued long-term growth. With the Group’s focus on strengthening its position as a global logistics powerhouse, more than 75% of equity and capital were allocated to the Logistics business during the year under review.

Strength of the Group’s balance sheet coupled with an optimised capital structure support Expolanka’s growth ambitions and ensures we deliver exceptional value and the best returns for our shareholders.

While maintaining a 13.42% gearing ratio through to the end of 2022, two large acquisitions completed during the last quarter saw a reduction in gearing over time. The Group completed FY 2023 with a gross Gearing Ratio of 17.55% reflecting key acquisitions and investment into intangibles with a long-term focus.

Exceptional quality of earnings

Quality of earnings capacity is paramount to Expolanka’s long-term sustainability, and was reflected in the strength of the Group’s Balance Sheet; with cash from business seeing a significant increase of 1,862% to Rs. 179.4 Bn.

The Group completed two large acquisitions during the last quarter of the financial year, with majority of the funding self-financed, further reflecting the strength of its balance sheet and cashflow position.

The Group’s excellent cash balance coupled with funding from parent Company SG Holdings, enabled Expolanka to complete two strategic acquisitions as part of investing and financing activities amounting to approximately Rs. 134.5 Bn.

The Group’s ability to settle debt, deliver strong returns to shareholders, and make strategic investments, showcases a strong balance sheet that augurs well for Expolanka’s future growth and expansion potential.

Robust financial position

The Group’s financial position remains strong at the close of the financial year ending 31 March 2023. The Group’s Total Assets stand at Rs. 220.9 Bn. Considering our asset-light business model, fixed assets share constituted 4.48%, while current assets including assets for sale, trade, and other receivables, made up the larger share of 30.9%. Buoyed by a stable Current Ratio of 2.98, the Group is well set to take advantage of growth opportunities in the future as global markets rebound.

Economic Value Added Statement

For the year ended 31 March 2023 Group
% Logistics Leisure Investment Gross
group total
group total
In Rs. Mn.
Direct economic value generated
Revenue 546,401 99.2 537,669 3,098 6,532 547,299 (898) 546,401
Dividend income 4 0.0 10 2,784 2,794 (2,790) 4
Other operating and
finance income
4,490 0.8 3,293 111 14,570 17,974 (13,484) 4,490
Share of profit of an associate and joint ventures 56 0.0 56 56
Total value added 550,951 100.0 540,972 3,209 23,886 568,067 (17,116) 550,951
Economic value distributed
Operating costs 460,601 83.6 455,200 1,338 5,872 462,410 (1,809) 460,601
Employee wages and benefits 43,412 7.9 41,843 690 879 43,412 43,412
Payments to providers of funds 17,770 3.2 1,731 55 16,030 17,816 (46) 17,770
Payments to government 7,864 1.4 7,582 255 27 7,864 7,864
Total distributed 529,647 96.1 506,356 2,338 22,808 531,502 (1,855) 529,647
Economic value retained
Depreciation and amortisation 6,265 1.1 5,175 60 122 5,357 908 6,265
Profit after dividends 15,039 2.7 29,429 811 1,025 31,265 (16,226) 15,039
Retained for reinvestment/growth 21,304 3.9 34,604 871 1,147 36,622 (15,318) 21,304

*All the inter-segment eliminations are reflected in eliminations/adjustment column.