Kathmandu. Flash Freight Logistics, which has been providing transit services for international trade, is preparing to list in the securities market by issuing shares (IPO) to the general public.
Headquartered in Pulchowk, Lalitpur, the company has received ‘Double B Issuer’ rating from rating company Care Ratings Nepal for the proposed IPO. According to CARE Ratings, there is a moderate level of risk for a company issuing such a rated share to meet its financial obligations within the stipulated time.
Although the financial situation has been evaluated for the ipo purpose, the information about the amount for which the IPO will be issued has not been brought to light.
How is the financial situation?
Flash Freight Logistics’ profit margin prior to tax and depreciation deductions has consistently been limited to single digits. According to a press release issued by CARE Ratings regarding the evaluation, fiscal year 2076. The margin was 3.21 percent in 2077. It reached 6.95 percent in the fiscal year 2080. 4.25 percent in 81 and 2081. It was limited to 4.46 percent in the first 10 months of 82. Net profit margin was between 0.57 per cent and 1.69 per cent.
This reflects the competitive and cost-sensitive nature of the transit service sector in Nepal, where the power of the service provider itself to determine prices is limited and operating costs remain high.
Return on capital 2077. It was limited to 8.5 percent in the last fiscal year from 30 percent in 78. It has improved to 14.8 per cent by mid-April of the current fiscal year. The return on net worth has increased from 5.5 per cent in the last fiscal year to 12 per cent in the first 10 months of the current fiscal year.
From a debt point of view, a low margin profile has limited the available opportunities to absorb cost pressures or demand fluctuations.
Flash Freight earned Rs 934 million in the first 10 months of the current fiscal year as against a total turnover of Rs 865 million in the last fiscal year.
More than two decades of experience
Established in 2003, the company provides services such as transportation of goods by air, land and waterways from India and third countries, customs clearances and storage in warehouses. During the corona epidemic, china had helped the traders in importing medicines and equipment required for corona treatment by air.
According to CARE Ratings, the company has more than 25 years of experience in the field of transportation services. The company has also partnered with global transit service provider DB Senker for the transit network.
The company is especially known for its transportation services of gold and silver, jewellery, expensive medical equipment and expensive medicines in Nepal.
Where did the 4-year-old plan reach ?
The company had signed an agreement with the Investment Promotion Board on December 29, 2019 for a feasibility study for the construction of logistics parks with warehouses for transit facilities in Birgunj and Bhairahawa. Although it prepared a detailed study report and submitted it to the board in about a year, no progress has been made in the construction of the park. At that time, chaudhary group and saraf group had also signed an agreement with the board for the construction of the logistics park, but the work has not progressed.
These companies have demanded that the government should provide land for a long period of time at a cheaper fee for the logistics park.
