Nestlé Sri Lanka unit profit up 34% amid rising net finance costs
ECONOMYNEXT – Benefit from the Sri Lankan market heavyweight Expolanka Holdings with a network of
logistics units in the US, EU, Asia and Africa for the June 2022 quarter increased by more than 220% due to its logistics business and exchange rate gain after the collapse of the rupee during the quarter.
The group posted a profit of 20.1 billion rupees in the June quarter, an increase of 220.6% from 6.3 billion rupees a year earlier. The June quarter profit was lower than the March quarter net profit by 31.4 billion rupees.
Expolanka Group reported earnings of 10.31 rupees per share for the quarter, compared to 3.22 rupees in the same quarter a year earlier.
The group said that during the period under review, as the rupee continued to depreciate, the firm made
6.9 billion rupees of foreign exchange gain, increasing the company’s net asset value by 25 billion
rupees for the quarter.
The group recorded revenue of 235.1 billion rupees, an increase of 145.7% over the previous year, while the cost of sales increased by 143.8% to 198.2 billion rupees, resulting in a gross profit of 36.9 billion rupees, a gain of 155.7%.
The group said its subsidiary EFL performed well during the quarter.
“The air cargo product saw lower volumes in the quarter, due to lower demand observed
in our key markets. EFL origins were nevertheless able to increase sales efforts by ensuring
outstanding service, capacity availability and transparency,” said Group Managing Director Hanif Yusuf.
shareholders in the quarterly report.
“The Ocean Freight product continued to gain momentum and delivered good growth during the
quarter under review.
Yusuf said while focusing primarily on its international freight forwarding business, EFL has been able to improve its capabilities across the national logistics portfolio in key locations, particularly in the North.
“Global market conditions remained volatile during the reporting period. Consumer demand was
tempered in our North American market, due to potential inflationary impacts, while the global market
energy crisis has led to increased pressure on oil prices. Prolonged lockdowns in China have resulted in
reduced supply and further intensified pressure on the supply chain,” Yusuf said.
“The freight rate correction was visible in both Air & Ocean Freight as capacity returned to the
market, albeit still at high levels.
“Origins such as Vietnam, India, Indonesia, Thailand and Sri Lanka continued to perform well,
reflecting the success of infrastructure investments made in these markets over the past
Selling and distribution expenses increased by nearly 300% to Rs 1.9 billion.
Finance charges increased by 467.6% to 552.3 million rupees while finance income increased to a
slower by 59.5% to 40.3 million rupees.
The total assets of the group increased by 16.4% to 344.9 million rupees.
Given the uncertain market conditions, the macro environment is expected to evolve, notably with
changing consumer demand patterns, agile supply chains and increased digitalization (Colombo/July