Ethiopian Shipping and Logistics (ESL), the state-owned logistics giant, has reported impressive financial results for the first half of the 2024/25 budget year, exceeding its revenue targets and achieving significant operational milestones.
Despite having to concentrate on feeder services for Ethiopian cargoes stored at nearby ports, ESL generated over a quarter of a billion dollars in foreign currency earnings from its cross-trade operations during this reporting period.
In a further demonstration of its strong financial health, the company paid a dividend of three billion birr to its parent organization, Ethiopian Investment Holdings (EIH).
According to the report, ESL recorded total income of 46.8 billion birr, surpassing its target of 44 billion birr by 106%. Expenses for the period were 37.5 billion birr, closely aligning with projections.
The company’s gross profit for the six months exceeded expectations by 50%, while its pre-tax profit reached 9.3 billion birr, significantly higher than the anticipated 6.2 billion birr.
Berisso Amallo, CEO of ESL, attributed this success to macroeconomic reforms that established a market-based exchange system, as well as growing revenues from cross-trade activities. He also noted that resolving challenges in the Red Sea region could further enhance cross-trade commerce.
One of ESL’s notable achievements was its performance in cross-trade operations, generating USD 271 million—16% more than its goal of USD 234 million for the specified time frame.
The logistics company prioritizes the cross-trade sector due to its capacity to generate substantial hard currency revenue. Over the fiscal year ending July 7, 2024, ESL secured USD 421 million from this business segment.
As the only deep-sea vessel operator on the African continent, ESL primarily focused on feeder services for Ethiopian cargoes during this period, as its partner vessel operators avoided the Red Sea for security reasons.
ESL’s vessels transported goods from ports such as King Abdullah in Saudi Arabia and Salalah in Oman to Djibouti, Ethiopia’s main maritime outlet. The company currently operates a fleet of ten vessels.
Experts note that ESL’s ability to achieve significant foreign currency earnings underscores its strategic adaptability and operational efficiency, even amid the constraints of focusing on feeder services. ESL’s cross-trade business, which involves transporting goods between foreign ports, has become a key revenue driver, significantly contributing to its overall financial success.
However, ESL has faced operational challenges due to the ongoing Ukraine-Russia crisis and hostilities in the Red Sea region involving Ansar Allah, also known as the Houthi militants of Yemen.
Despite facing obstacles, the company has successfully maintained its operations and achieved significant milestones.
One of the key accomplishments during the reporting period was the completion of audit reports for the past five years, a task that had previously been challenging for the corporate division. “We have completed the four-year audit report, starting with the 2019/20 fiscal year. We are now finalizing the audit report for the previous fiscal year in accordance with international standards,” said Berisso.
He emphasized that these audit reports would allow the company to expand into various sectors and uphold its global standing.
In addition to its financial achievements, ESL transferred three billion birr to its parent company, EIH, during the review period. EIH, a sovereign wealth fund, owns 34 large and strategically important public enterprises. This dividend payment follows a similar payout of three billion birr in the previous fiscal year.
Operationally, ESL transported over two million tons of freight in the first half of the budget year and successfully moved approximately 60,000 TEU containers using multimodal transportation.
Looking ahead, the company aims to handle 819,877 tons of cross-border freight and 4.3 million tons of import marine freight by the end of the fiscal year, as announced by the CEO in July of last year.
ESL’s strong performance underscores its critical role in Ethiopia’s logistics and trade sectors, even amidst regional and global challenges. With its continued focus on operational efficiency and strategic growth, the company is well-positioned to maintain its leadership in the maritime industry.