Aitken Spence pulls off strong first half despite tumultuous economic challenges

Diversified blue-chip Aitken Spence PLC reported a profit before tax of Rs.8.5 billion for the six months ended on September 30, 2022. This is an exponential quadruple-digit growth compared to Rs.266.7 million recorded for the same period during the previous year. 

Aitken Spence PLC reached an EBITDA (earnings inclusive of equity accounted investees before interest expenses, tax, depreciation and amortisation) of Rs.17.0 billion for the first half of the financial year, which was also 272 percent higher than the EBITDA of Rs.4.6 billion recorded during the first half of the previous year.
Meanwhile, for the first half, the group reported earnings of Rs.16.66 per share or Rs.6.7 billion, compared to earnings of 58 cents or Rs.235.2 million in the corresponding period of the previous year.

 For the quarter ended on September 30, 2022 (2Q23), the group reported earnings of Rs.2.25 or Rs.913.2 million, compared to earnings of Rs.1.18 per share or Rs.480.7 million reported for the same period, last year. 
This exceptional performance was driven by the group’s diverse presence in eight countries spanning 16 segments of operation. It is noteworthy that these results were achieved in a scenario in which the group’s finance costs increased by over 150 percent, due to the high interest rates on the LKR and USD prevailing during the period, compared to the low interest rate regime in the previous year.   

The group secured a revenue of Rs.43.3 billion for the first half of the financial year, which is a 133.3 percent growth over the revenue of Rs.18.6 billion recorded for the same period of the previous year. This unprecedented growth in business operations provides a positive indication towards the much-awaited resurgence of the tourism sector.

The group’s maritime and freight logistics sector contributed the highest sector PBT of Rs.5.1 billion for the six months, with an impressive growth of 188.6 percent. The enhanced overseas port management operations, increase in freight rates witnessed industry-wide coupled with the benefit of the foreign currency-denominated revenue, were the main reasons for an exceptional performance from this sector.  The improved performance across all companies of this sector was commendable. 

The group’s strategic investments sector recorded a PBT of Rs.4.4 billion, driven by a triple-digit growth of 703.3 percent for the six months ended on September 30, 2022. The improved performance was driven by the group’s plantations, printing and packaging and apparel manufacture segments and the sizable exchange gain recorded in the holding company contributed substantially towards this increase in the profits of the strategic investments sector.  During the quarter under review, expanding the group’s portfolio of renewable energy plants, the group acquired 100 percent shareholding in one of the largest utility scale solar farms in the country for a significant investment of Rs.1.4 billion. This endorses the group’s commitment to local and global sustainable development goals and towards achieving net zero status.

The group’s tourism sector showed a significant improvement, as it recorded a decrease in losses of 42.5 percent for the six months ended on September 30, 2022, despite the multiple crises that directly impacted the tourism industry. A noteworthy turnaround was witnessed in the group’s destination management segment and an encouraging recovery from the group’s overseas hotel segment coupled with the rupee devaluation positively impacting this sector.

The group’s services sector recorded a 7.9 percent growth in PBT, led by the insurance and property development segments for the six months ended on September 30, 2022. “Our compelling performance for the first six months of this financial year is a reflection of the group’s ability to transform and show resilience amidst tumultuous economic challenges that continue to prevail. There is much uncertainty but Aitken Spence will continue to ensure that its business models are sustainable and will enrich our communities and our environment,” commented Aitken Spence PLC Deputy Chairman and Managing Director Dr. Parakrama Dissanayake.

Aitken Spence is the first conglomerate in Sri Lanka to make a public commitment to the Science Based Targets initiative to achieve net zero emissions and is a frontrunner in the renewable energy space in Sri Lanka, providing 1.2 percent of the country’s peak energy demand through renewable sources. The organisation pioneers change in the diverse industries that it operates in and remains committed to transform the future.