Easter attacks overshadow Aitken Spence 1Q earnings

•  Earnings down to Rs.216.7mn
•  Revenue up over 17% to Rs.12.4bn
•  Overseas operations record strong growth

Diversified conglomerate Aitken Spence PLC, one of the leading resort hotel operators in the country saw its earnings for the June quarter (1Q20) impacted by the Easter Sunday attacks.

Easter Sunday attacks, which targeted Churches and star-class hotels in Colombo dealt a severe blow to the country’s tourism industry, as tourist arrivals plummeted nearly 71 percent year-on-year (YoY) in May.

Aitken Spence’s tourism sector performance during the June quarter reflected the struggle the tourism industry underwent following the bombings, though the group was somewhat able to minimize the damage with its Maldivian resort operations.

“…the resorts in the Maldives recorded a strong growth with the newly opened Heritance Aarah which is the first overseas operation to carry the premium brand Heritance,” a company statement said.

The tourism sector revenue for the quarter under review fell to Rs.4.9 billion from Rs.5.3 billion while the segment’s post-tax loss widened to Rs.512.2 million from Rs.296.2 million reported for the same period last year.

The group’s total earnings for the quarter was 53 cents a share or Rs.216.7 million, down from earnings of 64 cents per share or Rs.261.3 million reported for the corresponding period last year.

The revenue for quarter rose 17.5 percent over the previous year to Rs.12.4 billion helped by improved performance of the group’s maritime & logistics and strategic investments sectors.
Aitken Spence said the group had to incur an additional charge of Rs.36 million for the quarter due to the adoption of the new leasing standard SLFRS 16. There was no corresponding adjustment made in the previous year.

 
The group’s overseas market operations generated approximately 75 percent of its overall profits during the quarter compared to 60 percent in the first quarter of FY2018/19.
The revenue of the group’s maritime & logistics sector improved to Rs.2.18 billion during the quarter under review from Rs.2.7 billion a year ago, and segment’s post-tax profit rose to Rs.446.9 million from Rs.350.6 million.

The company statement said revenues were mainly driven by its overseas operations. 

Aitken Spence Maritime also facilitated the first luxury cruise ship  carrying 350 passengers to call on Sri Lankan ports post Easter Sunday attacks. 

The strategic investments sector of the group saw its revenue for the period surging to Rs.5.9 billion from Rs.3.5 billion a year ago while the segment’s post tax profit increased to Rs.238.9 million from Rs.201.5 million.

The strategic investments sector includes the group’s power generation, plantations, printing and garment businesses.

“Aitken Spence is a company that has proven that its strength is in its diversity. The devastation of the Easter attacks should motivate unity, resilience and continual progress. With normalcy being gradually restored, we are confident that business will bounce back, and our efforts will continue to this end,” Atiken Spence Deputy Chairman/Managing Director Dr. Parakrama Dissanayake said.

Business magnate Harry Jayawardena-controlled Melstacorp Limited and Rubicond Enterprises Limited together hold 67 percent of Aitken Spence while the Employees’ Provident Fund has 5.07 percent stake being the third largest shareholder.