Aitken Spence reports nine-month PBT of Rs.10.3bn with 214% growth

Blue-chip conglomerate Aitken Spence PLC reported a cumulative profit before tax (PBT) of Rs. 10.3billion for the nine months ended 31st December 2022, which was a significant growth of 213.7 percent over last year. 

The highest contribution to the Group’s profit before tax was from the maritime & freight logistics sector which accounted for 68.4 percent of Group PBT.

The Group’s earnings (inclusive of equity accounted investees) before interest expenses, tax, depreciation, and amortisation (EBITDA) for the nine months ended 31st December 2022 was an exceptional performance of Rs. 24.0 billion showcasing a growth of 144.9 percent. 

However, the translation to PBT was dampened by the 182.2 percent increase in finance cost to Rs. 8.3 billion, due to the high interest rate regime which prevailed during the reporting period.

Despite the 192.7 percent increase in income tax charge for the nine months, the Groups’ profit after tax (PAT) increased to Rs 7.3 billion, a growth of 223.1 percent.  

Income tax expense for the nine months ended 31st December 2022 increased to Rs 2.9 billion, stemming mainly from the significant increase in corporate tax rates that was implemented effective 1st October 2022. 

The Group’s maritime & freight logistics sector’s stellar performance of a cumulative PBT of Rs. 7.0 billion was led by the growth witnessed by freight, airline cargo GSA, integrated container and ship agency segments.

This was followed by the Group’s strategic investment sector that recorded a cumulative PBT of Rs. 3.6 billion with a growth of 395.1 percent mainly owing to the improved performances of the Group’s apparel manufacturing and printing and packaging segments and the foreign exchange gains recorded by the holding company. 

However, the excessive delays faced in the settlement of dues from the government in the power generation segment is causing a strain on the Group’s finances with unwarranted finance cost being borne by the sector. 

Despite this, Aitken Spence has been operating its 10MW waste-to-energy power plant based in Kerawalapitiya as halting operations would mean that the country’s Colombo District will once again be faced with a severe garbage crisis that could potentially lead to social and environmental problems. 

The Group’s services sector also recorded a strong cumulative PBT of Rs. 566.9 million with a double-digit growth. The Group’s tourism sector recorded a loss of Rs. 944.1 milion for the nine months ended 31st December 2022, mainly due to the challenges faced by the Sri Lankan hotel segment.

It is crucial that there are targeted marketing campaigns for key tourist generating source markets. Sri Lanka Tourism Development Authority (SLTDA) together with industry experts have identified seven countries based on the ability and potential to generate tourism and bring the much-needed foreign revenue into the country. 

The Group’s Destination Management segment carried out independent campaigns and through such campaigns introduced new source markets to Sri Lanka such as charter flights from Uzbekistan which commenced recently. 

During the 3Q, the Group recorded a PBT of Rs. 1.7 billion which was dampened due to the constraints faced by the renewable energy and the hotels segments. 

“The Aitken Spence Group has witnessed a positive recovery despite facing many setbacks, particularly in the renewable energy segment. Our performance in the cumulative first nine months goes beyond our expectations as we are committed to continually make our business models more sustainable for our people, communities, and our environment,” commented Dr. Parakrama Dissanayake, Deputy Chairman and Managing Director Aitken Spence PLC.