Aitken Spence overseas operations boost 9-month PBT

The blue-chip conglomerate, Aitken Spence PLC, remained resilient during a difficult period through its diversity of investments in eight countries, thereby recording favourable results for the nine months ended December 2019. 

Amidst the challenging times, the revenue of the group grew by 3.3 percent to Rs.43.8 billion for the period ended December 2019. The group’s EBITDA for the nine months remained stable at Rs.6.8 billion. 

Close to 57 percent of the group’s PBT of Rs.2.4 billion was generated through its investments overseas for the nine months ended December 2019.  

The group recorded a profit from operations of Rs.3.7 billion, compared to Rs.4.6 billion recorded the previous year for the nine months under review. This was primarily due to the significant foreign exchange gains recorded in the previous year, due to the 17.4 percent depreciation of the Sri Lankan rupee as against a 3.1 percent depreciation during the current year. The profit from the operations of the group stood at Rs.1.8 billion for the third quarter under review. 

The maritime and freight logistics sector performed exceptionally well recording a 20.6 percent growth in profits over the previous year. The integrated logistics and maritime segments continued their exceptional performance recording a significant improvement in profits. 

However, the group’s freight segment did not come up to the expectations, mainly due to the intense competition and lower yields.

The tourism sector continued to be affected from the April aftermath during the reporting period, due to the downturn the industry witnessed in the early part of the financial year.

 
The Maldivian hotels sector continued its healthy performance, though somewhat subdued, as a result of the initial losses incurred due to the partial closure of 100 rooms for refurbishment during the period. 

Notwithstanding the many obstacles witnessed by the local tourism industry, the group’s destination management segment maintained its market share of tourist arrivals to the country whilst upholding its position as the market leader in this segment. 

The tourism industry in Sri Lanka had seen a steady recovery following the Easter Sunday attacks, with tourist arrivals considerably improving during the last few months of 2019. 
However, the unfortunate outbreak of the coronavirus (2019-nCov) is dampening the recovery efforts of the country with cancellations being witnessed and the overall lack of interest in travel. 

The strategic investments sector contributed Rs.815 million towards the group PBT. The group’s investment in printing in Fiji is yet to bear fruition with considerable cost still being incurred on restructuring and revamping its operations.  The lower prices recorded for tea resulted in the decline of the performance of the plantation segment compared to the previous year, though remaining profitable. 

The services sector contributed 11.1 percent of the group’s PBT and recorded a 5.0 percent growth in PBT over the previous year.  The group’s first Heritance Property in the Maldives, Heritance Aarah, commenced commercial operations on October 1, 2019. 

This 150-room property recorded healthy levels of occupancy during the first months of operations and shows immense potential to command higher rates in the coming years. Following the ingrained ethos of sustainability at Aitken Spence, Heritance Aarah is the first property in the Maldives to receive the Leadership in Energy and Environmental Design (LEED) Gold certification.

Steady progress is seen in the construction of the country’s first waste-to-energy power plant, which is projected for completion shortly. Proving Aitken Spence’s commitment to the sustainable development of Sri Lanka, this pioneering venture will help solve the long outstanding waste disposal issue in Colombo city. 

An associate company of Aitken Spence PLC, Elpitiya Plantations PLC, has signed a memorandum of understanding (MoU) with Sim Leisure Group Ltd, a leading theme park developer and operator based in Penang, Malaysia, to set up a world-class ESCAPE theme park in the Galle region. 

This will promote economic development in terms of creating opportunities for local employment and boosting tourism in Sri Lanka. Construction of the theme park will commence in March 2020.