Ethiopian Shipping and Logistics (ESL) is forging ahead with an ambitious expansion plan to acquire six new vessels and increase its capital tenfold to 200 billion birr. This move is buoyed by record profits, despite a year marked by regional conflict, higher operating costs, and disruptions to global shipping.
The state-owned logistics company is boosting its capital from 20 billion birr to 200 billion birr while simultaneously advancing a procurement program designed to strengthen Ethiopia’s maritime transport capacity.
During the company’s annual performance briefing on Thursday, CEO Abdulber Shemsu stated that both the capital increase and vessel acquisition are progressing concurrently, although the procurement process has taken longer than initially anticipated.
“Vessel procurement follows public procurement procedures, so it has its own timeline,” Abdulber explained. “There have been some delays, but the process is progressing.”
The decision to significantly increase the company’s capital stems from Ethiopia’s shift to a market-based foreign exchange system, which substantially boosted the birr value of ESL’s foreign currency assets. Industry experts informed Capital that the sharp depreciation of the birr over the past year significantly expanded the company’s balance sheet, prompting management to revise its initial capital plan.
This foreign exchange reform has also yielded substantial accounting gains. ESL earned approximately 14 billion birr in non-operating income from its foreign currency assets during the first year of the reform in 2024/25. In the fiscal year that concluded earlier this month, the company generated an additional 2.7 billion birr from similar foreign exchange-related gains.
Concurrently, the company is accelerating its fleet expansion plans. Earlier this month, a technical delegation led by Abdulber traveled to China to negotiate the purchase of second-hand vessels and contracts for newly built ships.
“The discussions covered both used vessels and the construction of new ones,” he told Capital.
ESL currently operates 10 ocean-going vessels, including nine multipurpose Supramax ships. Under its expansion strategy, the fleet is projected to grow to 16 vessels by 2030.
The procurement plan includes one second-hand container ship with a capacity of 3,000 to 5,000 TEUs, three second-hand Ultramax bulk carriers with carrying capacities of 60,000 to 65,000 deadweight tons, and two newly built heavy-lift Ultramax multipurpose vessels of similar capacity. While the second-hand vessels are expected to join the fleet once suitable ships are identified, the newly built vessels are likely to take at least two years to complete after contracts are signed.
The expansion follows one of ESL’s strongest financial performances in company history.
According to its unaudited annual report, ESL generated 157.2 billion birr in revenue during the 2025/26 fiscal year, transporting over seven million metric tons of cargo and exceeding its annual target by eight percent.
Net profit reached 25.4 billion birr, a 33.7 percent increase over the company’s target and approximately 45 percent higher than the previous fiscal year. Foreign currency earnings also rose to USD 551 million, roughly USD 50 million more than the previous year.
Abdulber attributed the improved performance to a strategic shift, with the company prioritizing higher-value cargo over simply increasing cargo volumes.
“We are giving priority to high-value cargo such as construction equipment and industrial machinery,” he stated.
These results were achieved despite one of the most challenging operating environments the company has faced recently.
One ESL vessel was stranded in the United Arab Emirates for over four months due to disruptions linked to tensions around the Strait of Hormuz. Fuel shortages, volatile fuel prices, rising insurance costs, and severe congestion at Djibouti’s ports further strained operations as more ships diverted from Gulf ports due to regional instability.
Consequently, the company’s operating expenses climbed to 124 billion birr, nearly 10 percent higher than the 113 billion birr originally budgeted for the year.
ESL is also closely monitoring the deteriorating security situation in the Red Sea and wider Middle East, where attacks on commercial vessels continue to pose risks to international shipping.
Abdulber noted that the company is evaluating whether to introduce feeder services in the region or reroute vessels on longer voyages, depending on the evolving security situation.
“Our priority is to ensure Ethiopian cargo continues moving without interruption,” he emphasized.
He added that Ethiopian-flagged vessels have continued operations even during previous periods of heightened regional tension, including regular calls at Khor Fakkan Port in the United Arab Emirates.
Looking ahead, ESL has set ambitious targets for 2030, planning to generate 350 billion birr in annual revenue and USD 2 billion in foreign currency earnings, while increasing annual cargo throughput to 18.4 million metric tons. The strategy also includes expanding its container fleet to 100,000 units, reinforcing the company’s role as Ethiopia’s main maritime gateway.
