Aitken Spence non-tourism sectors record highest ever PBT of Rs.5bn in FY21

• Group shows improved financial position in 4Q due to spurt in biz activities in economy 
• 4Q net profit on par with last year’s amid lower tax expense, though with a significant drop in revenue
• For FY21, group net loss tops Rs.1.6bn with revenue declining by more than Rs.20bn

During a turbulent financial year that was affected by the unprecedented COVID-19 pandemic, Aitken Spence Group’s non-tourism sectors delivered the highest ever profit before tax (PBT) of Rs. 5.01 billion for the twelve months ending 31stMarch 2021 (FY21) compared to Rs. 4.2 billion last year, partially offsetting the impact of the Group’s tourism portfolio which recorded its worst year ever due to the devastating pandemic impact.

The group’s non-tourism sectors overcame multiple challenges including business disruptions, health and safety risks faced by the Spensonians and the overall slowing down of economic activity to record a growth in profit before tax of 55 percent in the fourth quarter and 18.9 percent in the financial year, compared to the corresponding periods in the previous year.

During the fourth quarter, Aitken Spence saw its financial position improving, with the group reporting a net profit of little over Rs.1 billion on par with previous year, helped by lower income tax expense. The group earnings per share for the quarter was Rs.2.51 unchanged from a year ago.

However, for the full year, the group reported a net loss of Rs.1.66 billion compared to a net profit of Rs.2.88 billion in FY 20.

Meanwhile, the maritime and freight logistics sector of the group, which has operations across 5 countries contributed 51.2 percent to the Group’s non-tourism profit before tax by recording Rs. 2.6 billion which is a growth of 13.9 percent year-on- year (YoY). 

This is despite the overall decline in trade volumes during the year. The cargo general sales agencies represented by the Group performed exceptionally well which benefitted from increased freight rates and innovative marketing efforts. 

Despite the lower import and export volumes recorded by the country during the year, the Group’s integrated logistics segment witnessed a growth in profits due to strategic shifts implemented in business activities. 

It is noteworthy that amidst challenges the sector established new strategic partnerships demonstrating the confidence of the business partners in these companies and the Group. The strategic investment sector was the second highest contributor towards the Group’s performance with a profit before tax of Rs. 2.1 billion, which is a growth of 23.3 percent year-on-year.  The country’s first ever waste-to-energy power plant commenced in February 2021 with a healthy contribution during these months of operation. The Group recently invested in three more renewable energy projects, expanding its portfolio in hydropower in the pursuit of meeting rising energy demands, sustainable development, access to clean energy and lowering the national carbon footprint. 

The Group’s investment in plantations provided a substantial boost to the overall earnings of the sector recording its highest ever profit since inception due to its balanced diversified portfolio. The services sector performance was commendable recording a profit before tax of Rs. 392 million which is a growth of 31.8 percent year-on-year. The money transfer segment responded to a change in customer needs by facilitating a door-step delivery solution with no additional cost and a direct to bank facility, which resulted in an increase in remittances handled and a record year of performance for the business unit.  The insurance segment was able to record a marginal increase in profitability compared to the previous year through innovative solutions despite challenges posed by the pandemic.

The elevators segment had an improved year, to record a profit for the year despite the temporary slowdown in the construction industry. The tourism sector was worst affected as border closures brought international tourism to a halt. The tourism sector recorded a sharp decline in revenue from which the sector is still recovering due to the recurrence of the pandemic in source markets despite the roll out of vaccines.  However, the Group led the revival of the tourism sector in Sri Lanka and significantly contributed towards the recovery through facilitation of the first of the charter flights to Sri Lanka since the reopening of the airports on 21st January 2021, from unconventional markets such as Kazakhstan. The Group accounts for over 35 percent of the total arrivals to Sri Lanka from the date of reopening of airports to the end of the financial year. The resorts of the Group in the Maldives recorded a promising revival with the gradual reopening of the resorts from the third quarter of the financial year, with the segment recording a profit from operations for the fourth quarter. Overall, the Group recorded a loss before tax of Rs.2.8 billion with the tourism sector reporting a loss of Rs. 7.8 billion for the year. Nevertheless, the group’s resilience despite its large exposure to the tourism sector is commendable at a time when some of the world’s largest tour operators and air lines required government bailouts in order to keep afloat.    “During yet another challenging year, Aitken Spence has been reinventing its businesses and our priorities are focused on re-strategising our operations and business models while strengthening resilience. With this objective, the Group embarked on a business and process transformation drive across all business segments. 

“Our strategy to realign, reinvent and relaunch has been adopted very well by our motivated Spensonians proving their true grit,” commented Dr. Parakrama Dissanayake, Deputy Chairman and Managing Director of Aitken Spence PLC.