A

Impact of the Sri Lankan Economy

• Expolanka derives 92% of its revenue from international markets with the USA bringing 70% of the revenue and 81% of the gross profit, therefore Growth/ Decline of the Sri Lankan economy will not have any material effect on the Expolanka Plc.

• A material consideration would be the potential appreciation or depreciation of the rupee stemming from a growth or decline of the Sri Lankan economy.

B

Resilient US Economy

• A resilient US economy is pivotal for Expo Lanka’s Air & Ocean freight services under its logistics operations as the USA trade route accounts for 82% of Gross Profit.

• Currently, (a) high inflationary situation (b) 14 year high interest rates (c) slowdown in consumer demand have contributed to moderating economic activity in the United States.

C

Volatile Commodity Prices

• Rising energy costs due to oil production cuts by Russia and Saudi Arabia have further impacted the global trade.

.

D

Trade disruption from Middle East conflict

• The middle eastern conflict, specifically the Israel-Palestine conflict and the recent Red Sea attacks on merchant ships, is not set to have major direct impact on Expolanka Plc, since the middle eastern trade routes account for a negligible proportion of Expolanka’s operations.

• But, it’s important to note that the middle eastern routes are important for global trade, the material effect from this would be, rising freight rates from supply chain disruptions caused from the attacks.

E

Interest rate hike in Japan

• From our analysis an interest rate hike in Japan, will not have any major impact on Expolanka’s main revenue streams since, Expolanka is based in Sri Lanka where the parent company is based in Japan.

• An interest rate hike in Japan would lead to a stronger yen, and could impact capital flows and trade dynamics but looking at an individual level this should not have any major impact on Expolanka