Aitken Spence PAT up 6.6% to Rs. 4.9 b in FY 15

Blue chip conglomerate Aitken Spence PLC yesterday announced its profit after tax in the financial year ended on 31 March 2015 has increased by 6.6% to Rs. 4.9 billion.

Profit before tax amounted to Rs. 5.7 billion a growth of 4.9% over the previous year. The diversified Group’s annual revenue rose a marginal 0.7 percent to Rs. 35.3 billion whilst earnings per share declined by 2.5% to Rs. 8.82 for the financial year.

“Although this year has been a difficult year in terms of performance, it must be noted that while riding the wave of external challenges, we have turned inwards to strengthen ourselves to reap the opportunities of the future. We are thus optimistic about the future growth of the Company,” said Aitken Spence PLC’s Chairman Deshamanya D.H.S. Jayawardena.

“Aitken Spence has recorded another year of resilient performance. Diversification held the Group in good stead in 2014/15, to grow amidst challenging global economic conditions and intense competition,” Aitken Spence Deputy Chairman and Managing Director J.M.S. Brito said.

The revenue of the tourism sector for the financial year grew by 5.1% to Rs. 17.8 billion whilst recording a profit before tax of Rs. 4.2 billion and a profit after tax of Rs. 3.7 billion, a decline of 2.2% and 1.2% respectively, for the year.

The decline in tourism sector bottom line was mainly due to the decline in profits from hotels in Sri Lanka and overseas which was primarily attributable to the adverse impacts of the global political and economic climate. The company owns and manages a chain of hotels in Sri Lanka, Maldives, Oman and India.

The Group’s destination management segment performed remarkably well. Aitken Spence Travels is Sri Lanka’s largest destination management company which during 2014/15, became the first and only company to handle 100,000 tourists to the country within a financial year.

“The coming year will be an exciting one for the sector, as we add Heritance Negombo to our portfolio and also expand capacity at The Sands, Kalutara by 91 rooms. Construction of the RIU Hotel in Ahungalla is well on target and we are excited by the possibilities offered by our partnership with RIU, and its parent company TUI,” added Brito.

Annual revenue for the Maritime Logistics sector increased by 3.9% to Rs. 7.7 billion whilst profits before tax increased by 4.3% to Rs. 735 million and profit after tax increased by 8.1% to Rs. 614 million. The Maritime and Logistic sector experienced weaker performances from the freight forwarding and the logistics segments whilst overseas investments performed well.

Strategic Investments sector’s profits surged during the year, with profit before tax swelling by 207% and profit after tax rising by 341% to Rs. 613 million and Rs. 509 million respectively. However, the sector reported a year-on-year decrease of 6.4% in revenue to Rs. 15.2 billion mainly due to the reduction in revenue from the power segment. The sector’s printing and garments segments have reported exceptional performances.

The Company expanded the garment sector’s production capacity by up to 40% during the period under review, by commissioning a new environment-friendly production facility in Koggala. The plant was built in four months and will create 750 jobs once in full operation.

The Plantations segment reported outstanding results driven by an efficient diversification initiative. The Power generation segment also showed an increase in profits compared to the previous year due to the sale of two idling power plants which resulted in a lower cost of maintenance.

Services sector reported a revenue of Rs. 1.1 billion for the financial year which was a growth of 15.1%. The sector’s profit before tax stood at Rs 132 million, a decline of 38% compared to the previous year. Profit after tax reported a drop of 52% to Rs. 83 million.

Except for insurance, elevators and property businesses, the other segments within the sector recorded disappointing performances. The relatively nascent information technology segment accounted for a significant share of the losses in this sector. The company has addressed the poor performance by restructuring the company, which is expected to lead to a better performance in the next financial year

With a history spanning 150 years, Aitken Spence PLC is among Sri Lanka’s leading and most respected corporate entities with operations in South Asia, the Middle East, Africa and South Pacific. Listed in the Colombo Stock Exchange since 1983, it is an industry leader in hotels, travel, maritime services, logistics, power generation and printing, with a significant presence in plantations, apparel, financial services, insurance and information technology.