Expolanka Annual Report has been uploaded to CSE now.
Long term investors should carefully study this, because many key points of their success and many arears which they expecting to grow, have disclosed in several pages.
Specially have to refer Group CEO's statement on page number 15, 16 and 17 and highlights the future promising of the company.GROUP CEO’S REVIEW
Dear Stakeholder It has been a momentous and memorable year for the Expo Group. Demonstrating its true grit, determination, and a dare to do spirit the Group delivered outstanding results during the last financial year. This achievement is a realisation of our consistent, continuous strategy which we put into place in 2017 to grow EFL, our logistics business particularly in our core markets, where over the past three years, we have pursued a holistic and unified approach which enabled us to deepen our penetration in our focused operations. The strategy that we adopted has enabled the company to transform itself into a leading player in the global logistics sphere
and these results we see today are an outcome of the culmination of the diligent, hard work and efforts that have been put in over the last several years. Group Results The Group posted a record revenue of Rs. 218.7Bn
(YoY 112%) driven by the logistics sector. Guided by our proactive strategies on procurement & efficiencies, the Group was able to successfully navigate through challenging market conditions and deliver a Gross Profit of Rs. 38.4Bn
(YoY 100%). The hallmark of our performance during the year was our constant attention to meeting customer demands, working closely with our partners, optimising our cash flows which enabled us to deliver a PAT of Rs. 14.8Bn
. Business Review Having made a quantum leap to expand beyond our roots as a subcontinent-based freight operator, our rapid global expansion over the past three years, has propelled EFL to the forefront of the global logistics arena. It is therefore with deep sense of accomplishment that I acknowledge that EFL is now recognised among the upper echelons of the logistics industry in the world. That being said, I am confident that it was our continuous investments into building our organisational infrastructure by strengthening our global sales teams, consolidating and growing our network origins to enhance global visibility of our brand
, refining our procurement strategy while developing the spirit of our employees, has given EFL an edge over competitors. A cohesive effort spanning the entire organisation, including dynamic .
strategies by origin stations to ensure service delivery to customers in the most efficient manner complemented the initiatives led by the sales and procurement teams. It is also very encouraging to see EFL benefiting from increased wallet share from several of its key customers. This I believe is a reflection of the close customer relationships built over the years as well as the steadfast commitment shown by EFL to support its customers to overcome the pandemic related constraints. An indication of the continued progress of our business was reflected in the volumes generated during the last quarter of the year, where our overall volumes for the 4th quarter surpassed the volumes
reported in the same quarter of previous financial year. From a trade lane perspective, the US trade lane operation remained the most active during the period under review contributing a significant share of our overall business operation. Our persistent and relentless endeavor to grow this trade lane through investments that we had made in the past is well reflected in the results that we see today. Being well placed in this market also enabled us to move with relative ease to accelerate new customer acquisition strategies as well as to make steady progress in capturing new customers across various verticals
. Complementing on the above strengths, we also made a conscious effort to grow our Far East business, which saw established markets such as China, Vietnam, Indonesia and Cambodia surge ahead with strong growth and new markets such as Malaysia and Taiwan displaying positive momentum.
I am also pleased to note that our traditionally strong Indian subcontinent market performed exceptionally well
, a further reflection of our strategic attention. Despite the pandemic environment, the European Trade lane made satisfactory progress
, particularly with our traditional businesses. Initial investments into Denmark and Belgium performed creditably
during this period. We have long term aspirations in growing this market, which we feel will be a critical component of success in the future
. The Intra Asia trade lane operations were somewhat muted during the year,understandably so given the reduced trade flows within the region. Nonetheless, we are very optimistic on the prospects of trade within this region
. While remaining agile and flexible, and adjusting our business operations and business model to meet the challenges of global disruptions to supply chain and staying true to our customer centric approach, allowed EFL to seamlessly pivot to opportunities available in the market. Furthermore, we were also able to leverage our relationships built over the last several years with carrier networks
. These relationships which we had developed overtime along with constant engagement, careful planning, collaborative efforts supported by a data driven approach enabled us to secure capacity efficiently and optimise our procurement costs in challenging conditions
. Meanwhile, focused efforts to broad base the carrier networks paved the way for EFL to augment its customer offerings through more flexible, bespoke solutions to meet customer demands. The Ocean Freight market too remained very dynamic and was impacted by container shortages and port congestions resulting in relatively higher rates. Despite lower capacity and higher rates, here too EFL was able to tap into its long term carrier partnerships, supported by proactive procurement strategies, to maintain a healthy profitability during the year
. While efforts to pursue organic growth in key stronghold markets delivered excellent results and helped EFL to significantly improve its captive market share, we also capitalised on the opportunity to diversify into new verticals in order to drive revenue growth and boost profits.
The decision to diversify into selected verticals, forms part of a broader portfolio expansion strategy that we initiated in 2017 with the aim of enhancing EFL’s industry presence across key business operations.
Having already made some notable progress in the past, we were able to further accelerate our portfolio diversification strategy during the year owing to the reputation that EFL had built as a trusted, dependable forwarder and also the capability to service its customers efficiently inspite of the pandemic environment. I am pleased to note that EFL was able to make sustained progress and gain a firm foothold in the Tech, Perishable, Pharma, Automobile verticals.
EFL’s multi origin network in 29 countries across the globe
, once again made all the difference in facilitating these efforts. At the same time, we were able to secure several bulk shipments of PPE cargo and medical supplies mainly from EFL’s origin stations in the Far East. Another area that we focused on quite actively during this past year, was technology adoption to retrofit our front end customer interfaces to bring more end to end visibility to the customer and also standardise backend systems across the network. Determined to move ahead with our digital agenda
as planned, we pushed through with the continued developments of our ERP platform across the network which was completed via a highly successful virtual roll out covering all EFL stations globally. With the infrastructure in place, EFL now has a solid foundation to provide a premier customer experience that includes integrated solutions coupled with increased visibility through the customers’ entire transaction journey with EFL from shipment quote to delivery.
This past year has brought out the very best in our people. I am especially proud of how our employees around the world worked tirelessly to ensure that our operations continue to function, even amidst pandemic related limitations. The spirit and determination shown by each and every employee is, I believe a true manifestation of what Expo Group stands for; our values; the dedication to excellence, the willingness to innovate and our commitment to uphold stakeholder interest.. This show of strength and resilience has made it clear that we are indeed “one team pursuing one dream”. Even as we prioritise the expansion of EFL’s global operations, sustainability remains a key strategic element in our overall growth agenda. We consider sustainability as an extension of our business and as such strive to holistically embed sustainability concepts into our operational framework. To make this a reality, our sustainability strategy encompasses a broad range of stakeholders our business partners (customers & suppliers), our valued employees the environment we operate in and the community. Working closely with our stakeholders we aim to better align our goals to take cognizance of the key environmental and social issues we all are faced with. Taking a significant step to advance its sustainability footprint, EFL in 2020 made a commitment to implement green logistics to offset carbon emissions from its freight operations. We made good on this commitment in 2020 by supporting a renewable energy project in India which enabled us to neutralise carbon emissions pertaining to shipments of our top 10 customers. I am encouraged by how well our leisure sector has navigated its way through a very challenging year for the industry. Taking a longer term perspective, the sector adopted a more holistic approach by realigning its service portfolio and reorganising itself in order to transition into a more efficient, and leaner organisation. The business continued to prioritise the needs of customers above all else and true to its innovative nature, developed several new services & travel solutions to meet the needs of the hour. Past investments in digital technology has without a doubt been a significant advantage in creating solutions geared towards travel during a pandemic environment. Not content with these measures alone, we also ventured into domestic tourism quite aggressively in the year under review. This was a timely move that delivered some very encouraging outcomes that helped Classic Travel to tide over the difficult times. The sector had to undertake certain resizing initiatives, which were undertaken in a streamlined and responsible manner to safeguard the interests of all stakeholders. Our efforts to remain resilient in the face of the pandemic, were recognised publicly, with Classic Travel being awarded the Restart Resilience Award under the Service Sector Large Category at the SLIM Brand Excellence Awards 2020. Our investment sector
businesses reported a satisfactory performance for the year under review amidst mixed results from the export businesses. Our IT solutions business ITX 360 made significant progress to deliver an outstanding results for the FY 2020/21 I would also like to point out that the constant support and guidance given by our parent company gave us a lot of confidence to move forward fearlessly with vigor and precision. By being able to access funds in an efficient and effective manner to fund our growth initiatives, we were able to further strengthen the Group’s balance sheet.
Future Direction All in all this past year has been remarkable in many ways. It has been a year of solid growth, where we saw the results of our sustained strategy over the past few years coming into fruition. The outstanding financial performance gives me reason to believe that the Investments and strategies adopted during the last several years along with our ability to demonstrate our strengths as a trusted, reliable and dependable logistics partner during the current year, has laid the foundation for the company to further expedite its growth initiatives into the future which will be holistically supported by Financial Capital, Human Capital and our strong technology platform. This gives me reason to be very excited for the future and growth of our Group in the future. For EFL, the main focus in the next few years would be to firm up its presence across all its global stations and expand its footprint.
In this regard, we expect to adopt a multipronged strategy to grow the customer base and increase captive market share. We expect our decision to move into the USA domestic logistics area will also give us the necessary leverage to position EFL as an end to end solution based supply Chain Company in North America.
Going forward, we will also pursue several initiatives to grow our reach in the European market.
EFL will look to leverage its strong brand presence, market acceptance and network operations to pursue potential opportunities in this market as it continues to recover. As always we will continue to work towards building on EFL’s stronghold markets in Asia
, while keeping a keen eye on emerging opportunities that complement EFL’s strategic objectives. I expect our focus on digital technology adoption to also gather momentum as EFL strives to position itself as a key partner across all major global supply chain networks. As Sri Lanka’s travel industry moves towards greater consolidation with smaller players exiting the market over the longer term, I believe it will open up opportunities for larger players to gain captive market share in the future. Classic Travels will continue to focus on maintaining the highest standards of customer service and build on its core strength of being the most reliable travel partner in the industry. This is only the start of our journey, and I sincerely believe that the Expo Group has much more to achieve over the next several years as we surge ahead with our growth plans.
We will continue on our growth journey focusing on developing our infrastructure, further strengthening our competencies, expanding into new markets, deploying our technology competencies, attracting the right resources across to the organisation, all with the aim of delivering strong, sustainable returns to all our stakeholders Appreciations At the onset, I would like to extend a warm welcome to Mr. Hitoshi Kanahori, our new Chairman and my fellow Board Members, Mr. Ha Yo and Mr. Akira Oyama. I would also like to place on record my sincere appreciation to Mr. Naosuke Kawasaki, Mr. Motonori Matsuzono and Mr. Yoshifumi Matsubara who resigned from the board with effect 30th June 2020. They were part of the board since 2014 who greatly assisted and supported our growth journey. I like to thank the Board for their insight vision, and leadership to enable the Expo Group deliver its best ever performance to date in the midst of a pandemic Let me also take this opportunity to thank all our leadership teams and our employees around the world who have worked tirelessly under difficult conditions with sincerity dedication and commitment. I am immensely proud of the way in which you have risen to the challenge to do what is needed to support your respective companies in these unprecedented circumstances. I am equally grateful for the ongoing support received from our customers, business partners and shareholders. This past year has only served to strengthen our ties which I hope will pave the way for us to work together to meet our stakeholder commitments whilst always being cognizant of the environmental and social responsibility.
Executive Director and Group CEO