Aitken Spence non-tourism sectors record highest-ever PBT of Rs. 5 b in FY21

During a turbulent financial year that was affected by the unprecedented COVID-19 pandemic, Aitken Spence Group’s non-tourism sectors delivered a highest-ever profit before tax of Rs. 5.01 billion, for the twelve months ending 31 March 2021, compared to Rs. 4.2 billion last year. This partially offset the impact of the Group’s tourism portfolio, which recorded its worst year ever due to the devastating impact of the pandemic. 

In a statement, Aitken Spence said the Group’s non-tourism sectors overcame multiple challenges including business disruptions, health and safety risks faced by the ‘Spensonians,’ and the overall slowing down of economic activity, to record a growth in profit before tax of 55% in the fourth quarter and 18.9% in the financial year, compared to the corresponding periods in the previous year. 

The Maritime and Freight Logistics sector, which has operations across five countries, contributed 51.2% of the Group’s non-tourism profit before tax by recording Rs. 2.6 billion which is a growth of 13.9% year-on-year. This is despite the overall decline in trade volumes during the year. The cargo general sales agencies represented by the Group performed exceptionally well, which benefitted from increased freight rates and innovative marketing efforts. Despite the lower import and export volumes recorded by the country during the year, the Group’s integrated logistics segment witnessed a growth in profits due to strategic shifts implemented in its business activities. It is noteworthy that amidst many challenges the sector established new strategic partnerships, demonstrating the confidence of the business partners in these companies and the Group.

The Strategic Investments sector was the second highest contributor towards the Group’s performance with a profit before tax of Rs. 2.1 billion, which is a growth of 23.3% year-on-year. The country’s first ever waste-to-energy power plant commenced in February with a healthy contribution during these months of operation. The Group recently invested in three more renewable energy projects, expanding its portfolio in hydropower in the pursuit of meeting rising energy demands, sustainable development, access to clean energy and lowering the national carbon footprint. The Group’s investment in plantations provided a substantial boost to the overall earnings of the sector, recording its highest ever profit from inception due to its balanced portfolio of diversification.

The Services sector performance was commendable, recording a profit before tax of Rs. 392 million, which is a growth of 31.8% year-on-year. The Money Transfer segment responded to a change in customer needs by facilitating a doorstep delivery solution with no additional cost, and a direct to bank facility, which resulted in an increase in remittances handled and a record year of performance for the business unit. The Insurance segment was able to record a marginal increase in profitability compared to the previous year through innovative solutions, despite the challenges posed by the pandemic. The Elevators segment had an improved year, to record a profit for the year despite the temporary slowdown in the construction industry.

The Tourism sector was the worst affected, as border closures brought international tourism to a halt. The Tourism sector recorded a sharp decline in revenue from which the sector is still recovering due to the recurrence of the pandemic in source markets, despite the roll out of vaccines. Notwithstanding these setbacks, Heritance Kandalama Sri Lanka, and Heritance Aarah Maldives, belonging to the Group’s Heritance Hotels and Resorts cluster was the only Sri Lankan hotel chain to be recognised at the Condé Nast Traveller Readers’ Choice Awards Middle East 2020. Moreover, Aitken Spence Travels became one of the first Destination Management Companies (DMCs) to be awarded the ‘Safe and Secure’ Tourism Certificate of Compliance by the Sri Lanka Tourism Development Authority (SLTDA).

The Group led the revival of the tourism sector in Sri Lanka and significantly contributed towards the recovery through facilitation of the first of the charter flights to Sri Lanka since the reopening of the airports on 21 January 2021, from unconventional markets such as Kazakhstan. The Group accounts for over 35% of the total arrivals to Sri Lanka from the date of reopening of airports to the end of the financial year. The resorts of the Group in the Maldives recorded a promising revival with the gradual reopening of the resorts from the third quarter of the financial year, with the segment recording a profit from operations for the fourth quarter.

Overall, the Group recorded a loss before tax of Rs. 2.8 billion, with the tourism sector reporting a loss of Rs. 7.8 billion for the year. Nevertheless, the Group’s resilience despite its large exposure to the tourism sector is commendable at a time when some of the world’s largest tour operators and airlines required government bailouts in order to keep afloat.   

“During yet another challenging year, Aitken Spence has been reinventing its businesses and our priorities are focused on re-strategising our operations and business models while strengthening resilience. With this objective, the Group embarked on a business and process transformation drive across all business segments. Our strategy to realign, reinvent and relaunch has been adopted very well by our motivated ‘Spensonians’ proving their true grit. We are indeed confident of the capability of our team to take the Group to a brighter future in the new reality that has characterised the current business environment,” Deputy Chairman and Managing Director Dr. Parakrama Dissanayake said.

Aitken Spence PLC won the highest number of awards received by a single company at the Best Corporate Citizen Sustainability Award 2020 and is the only company to have ranked among the Top 10 Best Corporate Citizens in Sri Lanka for an unprecedented 15 consecutive years.

Listed in the Colombo Stock Exchange since 1983 and with a history spanning over 150 years, Aitken Spence is a blue-chip conglomerate with operations in 16 diverse segments in eight countries: Sri Lanka, Maldives, Fiji, Mozambique, India, Oman, Myanmar and Bangladesh.