Ex-pack Corrugated Cartons PLC
Introduction
Ex-pack Corrugated Cartons PLC, a subsidiary of Aberdeen Group was established in 1997, It is a Manufacturer and marketer of high quality printed corrugated cartons to an infinite range of customized high quality packaging solutions for both sri lankan and export markets. Ex-pack corrugated cartons limited provides conception, design, prototyping and production of die cut, laminated, telescopic and value-added cartons to suite the bespoke packaging requirements of clients. Ex-pack`s innovative product portfolio includes corrugated cartons, Storage solutions covering the garment industry and paper based environmental and eco-friendly warehousing facilities which caterers to FMCG, Home and appliance, fruits and vegetables exporters, tea exporters, garment and accessory supplier, boards, seafood exporters, rubber and coir, bicycles and others with their clientele including Coca Cola, CBL Group, Kinley, Vita coco, Anchor and Adamjee`s, T-Sips among many others.
EXPANSION
Recently the company completed the expansion of their existing facilities with new state of the art machineries through IPO proceeds. This development is projected to increase capacity by 50%.
Subsidiaries
Neptune Papers (Pvt) Limited (Neptune), a fully owned subsidiary of Ex-Pack, is committed to recycling Sri Lanka’s waste, from paper and fabric to polythene and plastic, under the banner of “Driving Sri Lanka’s Circular Economy.” Beyond generating revenue from recyclables, Neptune plays a vital role in diverting waste from landfills, reducing environmental harm, and creating meaningful impact. Neptune is a flagship environmentally focused subsidiary, as its operations extend well beyond commercial value to encompass a greater purpose: protecting the planet. During the year under review, Neptune recycled 39,475 metric tons of material and recorded revenue of LKR 3,593 Mn, reflecting a 5% year-on-year increase. Notably, 64% of this revenue was derived from exports.
Fundamentals
From 2020 to 2023 the company has been able to grow its Topline and bottomline at a rate above CAGR 65% , Increase its asset base by over 50% while keeping it`s debt levels muted which has enabled its net asset base and cash flows to grow by over 2.6 times. The company has also been able to improve it`s current ratio from 0.79 times to 1.21. The company has also increased its dividend per share from 0.41 cents per share to 2.47 rupees a share. But 2023 to 2025 has seen a reduction in topline by approximately 25% which has caused it`s asset base, cashflows and earnings to remain at very subdued levels. However It is imperative to note that Sri lanka witnessed a deep financial crisis in 2022 therefore the company being able to grow it`s revenue at a CAGR above 20% from 2020-2025 is an indication that there will be significant growth ahead since the sri lankan economy is rebounding swiftly which in turn should point to an increase in consumption.
MACRO
2022 marked one of the steepest financial crises ever witnessed by sri lanka which has caused consumption levels to drop to some of its lowest levels in history. But since it`s lowest point as of 2025 Sri lanka`s macroeconomic fundamentals are performing better than expected with strong fiscal strength. Interest rates continue to remain at low levels spurring growth.Sri lanka is expected to record a primnary surplus of 5-6% of GDP in 2025 and it is also expected to be at a surplus in 2026 which would record Sri lanka`s fourth consecutive year of primary surpluses which has never been achieved before.
RISKS
Risks can emerge from a global slowdown from recent tariff measures adopted by the USA which can cause a slowdown in consumption or policy reversal on the part of the Sri Lankan Government.
Conclusion
Sri lanka`s macro economic fundamentals performing better than expected with strong fiscal strength coupled with a low interest rate regime expected to remain in place till 2027 should see consumption levels returning to pre pandemic/crisis levels in mid 2026 and grow from there onwards. These positives in the domestic economy should offset the global risks consequently resulting in significant growth for Ex-pack corrugated cartons is my structural belief.
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Disclaimer
The user UshanDeSilva has a position in COSE:PACK.N0000. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.