Aug 31, 2011 (LBO) - New freight forwarding businesses in east Asia helped improve sales and profits for Sri Lanka's Expolanka Holdings, which aims to further expand overseas and penetrate emerging markets.
The newly listed group set up two ventures, Expo Freight Vietnam and PT Expo Unipara, Indonesia in the last year in line with its regional expansion strategies to consolidate its freight forwarding business.
In transportation, the group's biggest business, sales in the year ended March 31, 2011 rose 52 percent to 18 billion rupees and net profit shot up 106 percent to 1.3 billion rupees from a year ago, the company told shareholders in its annual report.
New transportation businesses with high margins contributed to increased profits for the group which has freight forwarding subsidiaries in 12 countries.
Transportation contributed 56 percent of Expolanka group sales with freight operations contributing 79 percent of revenue and general sales agencies and travel business the balance.
"The significant revenue increase from the transportation sector was primarily generated by the freight sub-sector whose revenue increased by 5.5 billion rupees over the previous year," the annual report said.
"The revenue growth was mainly achieved through focussed strategies by penetration into new geographies, namely Vietnam and Indonesia, in the freight sector and expansion of business through existing agencies."
Expolanka group's total net profit shot up 190 percent to 1.5 billion rupees during the year with sales up 37 percent to 32.5 billion rupees from the previous year.
The increase mainly came from the 52 percent growth in the group's transportation business as a result of it venturing into new geographies including Indonesia and Vietnam and expanding existing business, the report said.
Gross profit margins were maintained at 19 percent with lower finance costs and an effective lower tax rate owing to tax exemptions and government tax cuts helping improve the bottom line.
"In the freight sub-sector, mainly Expolanka Vietnam, Expolanka Bangladesh and Expolanka Freight India contributed significant revenue growth during the year under review," the report said.
"In assessing the profit levels in the transportation sector, the freight sub-sector contributed significantly towards the bottom line," it said.
"Expolanka Freight India and Expolanka Freight Vietnam contributed significant increases in the sector profit levels. The new entry to Vietnam proved to be a success both in terms of revenue and profits."
Group subsidiaries Expolanka Bangladesh and Expolanka Freight also contributed notable profit increases during the year.
"The freight companies fared well with those based in India, Bangladesh and Vietnam being the top performers," the report said.
The group is looking at expanding by increasing its overseas stations and penetrating developing markets and also buying small and medium-sized freight companies
source - www.lbo.lk
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