Aitken Spence achieves 33% PBT growth in 2Q from non-tourism operations

Diversified blue chip, Aitken Spence PLC, which has extensive interests in travel and tourism sector in Sri Lanka and overseas, saw its revenue almost halving during the quarter ended in September (2Q21) as the impact of coronavirus weighed on the group’s leisure sector operations.

The group reported net loss of Rs.800.7 million for the quarter under review against a net profit of Rs.355.2 million in the corresponding quarter last year, on revenue of Rs.6.7 billion against revenue of Rs.12.3 billion a year ago.
However, Aitken Spence in a statement said its non-tourism sectors reported profit-before-tax (PBT) of Rs.1.13 billion in 2Q21, recording a growth of 33 percent compared to the previous year in the midst of challenging economic conditions.  These sectors also reported an EBITDA (earnings before interest expense, tax, depreciation and amortization) of Rs.1.59 billion prior to the impact of forex compared to the second quarter of the 
previous year.

“The group’s non-tourism sectors continued their positive performance since the commencement of full operations after the lockdown in May 2020. The non-tourism sectors include companies in the plantations, renewable energy, maritime & freight logistics, apparel, insurance, elevator agency, printing & packaging, money transfer and maritime education & management segments,” the company statement said.

It also said the group’s new iconic venture, Sri Lanka’s first waste-to-energy project with an investment of Rs.13 billion will commence operations by the end of the year, overcoming all setbacks experienced due to the COVID-19 pandemic.  This project is expected to provide a sustainable solution to Colombo city’s waste management problem whilst adding renewable energy to the country’s energy profile.

The group’s plantation segment recorded an excellent performance during the quarter with a profit growth of over 140 percent. 

The maritime & freight logistics sector also performed remarkably to record a 17 percent increase in profits for the period. 

The apparel manufacturing segment delivered a six-fold growth in profits whilst the printing & packaging segment recorded a turnaround during the quarter.  Further, outstanding performances were seen from the insurance, elevator agency, and money transfer segments in the services sector that recorded a profit growth of 35 percent.
The group’s tourism sector EBITDA for 2Q21 was a loss of Rs.940 million since it was largely affected by curtailments in international travel that impacted the group’s destination management, hotels and airline GSA. 

“However, these companies commenced operations post-lockdown by serving the local customers and introduced new and exciting experiences to serve this clientele.  By offering customised excursions with unique experiences to the local market, the destination management segment of the group handled nearly 9,000 local clients during the quarter,” the statement said. “With the easing of the lockdown restrictions, Aitken Spence Hotels in Sri Lanka commenced operations in the second quarter catering to the local clientele.  All hotel properties were highly patronised and recorded satisfactory occupancy levels throughout the quarter. Due to the second wave of COVID-19 in October, operations have once again been curtailed; however, it is hoped that a new-normality will prevail with the implementation of all required health protocols,” it added. Meanwhile, Aitken Spence said most of the hotels and resorts representing the Heritance and Adaaran brands in the Maldives commenced operations and are seeing an upward 
trend in bookings. 

Maldives as a destination has attracted over 40,000 tourists since the opening of the country to international traffic post COVID-19 lockdown. Turyaa Chennai and Al Falaj Oman, remains operational throughout the period recording moderate occupancy levels and food and beverage revenue through the domestic traffic secured by these hotels.

Aitken Spence group recorded an EBITDA of nearly Rs.600 million for both tourism and non-tourism sectors for the quarter under review.

“We remain hopeful for a faster recovery in the group than achieved during the second quarter. The wider group of companies in the plantations, renewable energy, maritime & freight logistics, apparel, insurance, elevator agency, printing & packaging, money transfer and maritime education & management performed exceptionally well which was beyond our expectations. This is reassuring as it shows strong resilience despite the setback in the tourism industry,” said Dr. Parakrama Dissanayake, Deputy Chairman and Managing Director of Aitken Spence PLC.