Upbeat on outlook, maximizes resource deployment in growth areas
Expo Lanka Holdings PLC., now controlled by a Japanese conglomerate, has seen both turnover and earnings dip in the year ended March 31st 2015, but remains upbeat about its future prospects.
The company recently released its most comprehensive annual report since founding in 1978 and listing in 2011. In 2014, SG Holdings of Japan bought a 30% stake of Expolanka Holdings to aiming at the controlling 51% in the mandatory offer that followed.
Several members of the founding Kassim family sold down to give control to the Japanese investor whose representatives now have the majority board seats including the chairmanship.
However, the Kassims still retains a major interest in Expo with four of its members each owning between 8.22 to 8.35 % of the company and its CEO, Mr. Hanif Yusoof owning 7.52%.
The year under review saw group turnover dip a marginal 1.3% to Rs. 52.65 bn. from Rs. 53.32 bn. a year earlier. But the profit before tax was down 32.2% to Rs. 1.31 bn. and the profit after tax down 33.3% to Rs. 1.05 bn. Total assets, however, grew 0.6% to nearly Rs. 22 bn.
Expo’s business is mainly focused on freight and logistics accounting for 77% of its turnover while travel and leisure (5%), international trading and manufacturing (16%) and investment and services (1%)are also part of the portfolio.
The company’s chairman, Mr. Nobuaki Kondo, described the year under review as a focal year and one of "strategic fusion where we have focused our attention to critical growth factors sharpening our operational acumen through optimization initiatives."
He reported that the group continued to consolidate its various sectors moving with sustained momentum to reach key targets and had during the year continued to create a base for sustained growth identifying and enhancing the key growth sectors.
They had divested none-core operations where returns from divestment were ahead of the expected potential returns from re-investment into these sectors.
Kondo said that it is exactly one year since SG Holdings of Japan made an investment partnership with the Expolanka Group on the strength of their shared vision for the two corporates.
"I have had the pleasure of being at the helm of your group over the past financial year and attest to the joint efforts of SG Holdings and Expolanka Holdings to create synergies across both the entities, creating value across global boundaries," he said.
"With the fusion of these two corporates, the synergies that are yet to be explored are immense."
Kondo envisions strong growth for Expolanka in the medium term as the benefits of the strategic fusion begin to unfold. He expressed the belief that "we will witness the creation of a conglomerate that will be a powerhouse in the Asian subcontinent."
Group CEO Hanif Yusoof said that Expolanka had continued to execute business reconfigurations in the year under review further de-investing in non-key sectors aimed at better optimization of the group’s resources towards key growth sectors.
"The intention of the re-engineering efforts was to divest businesses that were falling below performance benchmarks and projected growth patterns," he said.
"Returns, scalability and scope remain the critical criteria in the divestment analysis."
He explained that their drive towards a value-drive base business model was a response to evolving business challenges. Most predominant of these has been a consistent erosion of margins despite sustained volume growth.
"Despite intense pressure on margins, your group sustained profitability posting a pre-tax profit of Rs. 1.3 bn. and an after tax profit of Rs. 1 bn.," he said. The group’s balance sheet as at March 31, 2015 remained healthy with a comfortable assets:liabilities balance while sustaining sound ratios across the board."
Yusoof said that freight and logistics remained the major core-contributor to the group’s consolidated performance during the reporting period as in the previous financial year.
The year under review saw the Expo Global Distribution Centre, a value-added bonded warehousing facility under the Free-port regulations at the Katunayake Export Processing Zone. This was a joint venture between Expolanka and Brandix Lanka providing a range of value added logistics services at point of origin to freight customers through the effective management of their supply chain - a first of its kind in Sri Lanka.
Yusoof also said that the travel and leisure sector undertook "bold and ambitious steps towards entering the next generation of travel business by dissecting the traditional travel market into specialist niches," enabling the sector to offer unique services to specific target audiences, specially high yield targets.
Some of the businesses divested included the tea plantation operations and the herbal pharmaceuticals sub-sector represented by the brand Baraka.
Expolanka has a stated capital of Rs. 4.1 bn., reserves of Rs. 10.7 mn. and retained earnings of Rs. 6.52 bn. in its books as at March 31, 2015. Total assets ran at nearly Rs. 22 bn. and total liabilities ran at Rs. 10.37 bn.
SG Holdings Global of Japan with 51.43% is the controlling shareholder followed by Mr. Osman Kassim (8.35%), Shafik Kassim (8.35%), Sattar Kassim (8.28%), Farook Kassim (8.22%) and Hanif Yusoof (7.22%).
Foreign and local institutions are also on the top 20 shareholders list but individually holding less than 2.2% of the company each.
The Expo share traded at a high of Rs. 10.80 during the year under review and a low of Rs. 8.50 closing at Rs. 8.50. This compared with a trading range of Rs. 9.90 to Rs. 6.50 closing at Rs. 8.70 the previous year.
The Directors of the company are Messrs. Nobuaki Kondo (Chairman), Hanif Yusoof (CEO), Osman Kassim, Harsha Amarasekera, Sanjay Kulatunga, Naosuke Kawasaki, Yoshifumi Matsubana, Motonori Matsuzono and Toji Shiho.
www.island.lk
Expo Lanka Holdings PLC., now controlled by a Japanese conglomerate, has seen both turnover and earnings dip in the year ended March 31st 2015, but remains upbeat about its future prospects.
The company recently released its most comprehensive annual report since founding in 1978 and listing in 2011. In 2014, SG Holdings of Japan bought a 30% stake of Expolanka Holdings to aiming at the controlling 51% in the mandatory offer that followed.
Several members of the founding Kassim family sold down to give control to the Japanese investor whose representatives now have the majority board seats including the chairmanship.
However, the Kassims still retains a major interest in Expo with four of its members each owning between 8.22 to 8.35 % of the company and its CEO, Mr. Hanif Yusoof owning 7.52%.
The year under review saw group turnover dip a marginal 1.3% to Rs. 52.65 bn. from Rs. 53.32 bn. a year earlier. But the profit before tax was down 32.2% to Rs. 1.31 bn. and the profit after tax down 33.3% to Rs. 1.05 bn. Total assets, however, grew 0.6% to nearly Rs. 22 bn.
Expo’s business is mainly focused on freight and logistics accounting for 77% of its turnover while travel and leisure (5%), international trading and manufacturing (16%) and investment and services (1%)are also part of the portfolio.
The company’s chairman, Mr. Nobuaki Kondo, described the year under review as a focal year and one of "strategic fusion where we have focused our attention to critical growth factors sharpening our operational acumen through optimization initiatives."
He reported that the group continued to consolidate its various sectors moving with sustained momentum to reach key targets and had during the year continued to create a base for sustained growth identifying and enhancing the key growth sectors.
They had divested none-core operations where returns from divestment were ahead of the expected potential returns from re-investment into these sectors.
Kondo said that it is exactly one year since SG Holdings of Japan made an investment partnership with the Expolanka Group on the strength of their shared vision for the two corporates.
"I have had the pleasure of being at the helm of your group over the past financial year and attest to the joint efforts of SG Holdings and Expolanka Holdings to create synergies across both the entities, creating value across global boundaries," he said.
"With the fusion of these two corporates, the synergies that are yet to be explored are immense."
Kondo envisions strong growth for Expolanka in the medium term as the benefits of the strategic fusion begin to unfold. He expressed the belief that "we will witness the creation of a conglomerate that will be a powerhouse in the Asian subcontinent."
Group CEO Hanif Yusoof said that Expolanka had continued to execute business reconfigurations in the year under review further de-investing in non-key sectors aimed at better optimization of the group’s resources towards key growth sectors.
"The intention of the re-engineering efforts was to divest businesses that were falling below performance benchmarks and projected growth patterns," he said.
"Returns, scalability and scope remain the critical criteria in the divestment analysis."
He explained that their drive towards a value-drive base business model was a response to evolving business challenges. Most predominant of these has been a consistent erosion of margins despite sustained volume growth.
"Despite intense pressure on margins, your group sustained profitability posting a pre-tax profit of Rs. 1.3 bn. and an after tax profit of Rs. 1 bn.," he said. The group’s balance sheet as at March 31, 2015 remained healthy with a comfortable assets:liabilities balance while sustaining sound ratios across the board."
Yusoof said that freight and logistics remained the major core-contributor to the group’s consolidated performance during the reporting period as in the previous financial year.
The year under review saw the Expo Global Distribution Centre, a value-added bonded warehousing facility under the Free-port regulations at the Katunayake Export Processing Zone. This was a joint venture between Expolanka and Brandix Lanka providing a range of value added logistics services at point of origin to freight customers through the effective management of their supply chain - a first of its kind in Sri Lanka.
Yusoof also said that the travel and leisure sector undertook "bold and ambitious steps towards entering the next generation of travel business by dissecting the traditional travel market into specialist niches," enabling the sector to offer unique services to specific target audiences, specially high yield targets.
Some of the businesses divested included the tea plantation operations and the herbal pharmaceuticals sub-sector represented by the brand Baraka.
Expolanka has a stated capital of Rs. 4.1 bn., reserves of Rs. 10.7 mn. and retained earnings of Rs. 6.52 bn. in its books as at March 31, 2015. Total assets ran at nearly Rs. 22 bn. and total liabilities ran at Rs. 10.37 bn.
SG Holdings Global of Japan with 51.43% is the controlling shareholder followed by Mr. Osman Kassim (8.35%), Shafik Kassim (8.35%), Sattar Kassim (8.28%), Farook Kassim (8.22%) and Hanif Yusoof (7.22%).
Foreign and local institutions are also on the top 20 shareholders list but individually holding less than 2.2% of the company each.
The Expo share traded at a high of Rs. 10.80 during the year under review and a low of Rs. 8.50 closing at Rs. 8.50. This compared with a trading range of Rs. 9.90 to Rs. 6.50 closing at Rs. 8.70 the previous year.
The Directors of the company are Messrs. Nobuaki Kondo (Chairman), Hanif Yusoof (CEO), Osman Kassim, Harsha Amarasekera, Sanjay Kulatunga, Naosuke Kawasaki, Yoshifumi Matsubana, Motonori Matsuzono and Toji Shiho.
www.island.lk
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