Aitken Spence results boosted by strong tourism performance

Friday, 4 February 2011 01:04 -     - {{hitsCtrl.values.hits}}

Aitken Spence PLC reported its third quarter financial results to the Colombo Stock Exchange on Thursday, showing Rs. 2.44 b as pre-tax profit and Rs. 1.63 b as profit attributable to shareholders for the nine months ended 31 December 2010; an increase of 13.5 per cent and 25 per cent respectively over the previous year.

The diversified group’s revenue rose by 5.2 per cent to Rs. 18.2 b and earnings per share increased by 25% to Rs. 4 over the same period.

Aitken Spence is among Sri Lanka’s leading and most respected corporate entities with interests in hotels, services, logistic solutions and strategic investments in South Asia, the Middle East and Africa.

“We are pleased to announce the strong performance of the group, mainly driven by a turnaround seen in the Sri Lankan hotels sector. We have plans to expand our hospitality portfolio in Sri Lanka with proposed resorts in several parts the island,” said J.M.S. Brito, Deputy Chairman and Managing Director of Aitken Spence.

The tourism sector has revealed exceptional results with a substantial growth in profits in the nine months ending 31 December 2010. Strong growth in the Sri Lankan hotels and inbound tourism boosted earnings in the sector. Aitken Spence is the largest resort operator and the largest inbound tour operator in Sri Lanka.

Neptune Hotel, which is presently undergoing extensive refurbishment, will open as Heritance Maha Gedara in mid-2011 as an Ayurveda wellness resort. The company-owned Ramada Resort Kalutara will also be closed from 31 March for expansion and major refurbishment and expected to open by the end of 2011.

Brown’s Beach Hotel, an associate company, will be closed from 31 March to undergo an extensive transformation.

Six Senses Resorts & Spas together with Aitken Spence Hotel Holdings PLC, a subsidiary of Aitken Spence, is commencing construction of the first Six Senses property in Sri Lanka as 50:50 joint venture, worth US$ 40 m.

Aitken Spence Hotels has added another resort to its portfolio in India by taking over the management of the hill resort, Grand Palace Hotel and Spa in Yercaud, in Tamil Nadu.

The Group’s resorts in the Maldives which operate as Adaaran Resorts, faced pressure on rates as demand from key Western markets is yet to recover fully from the financial crisis. Aitken Spence is one of the leading resort operators in the islands.

During the quarter under review, Adaaran Prestige Water Villas in the Maldives, run by Aitken Spence, won ‘World’s Leading Water Villa 2010’ award at the World Travel Awards 2010. Adaaran ‘Select’ Meedhupparu won Gold awards for the best hotel in its class, according to the feedback of Thomson Holidays customers.

Aitken Spence Printing, which counts over five decades of commitment to quality and innovation, has commenced the development of a state-of-the-art printing complex during quarter, which is expected to drive growth in the sector.

The Plantations Division, which has in its portfolio tea, rubber and palm oil, performed well, with a significant turnaround in profits over the previous year.

During the period under review, the Aitken Spence-China Merchant Holdings International consortium has been awarded the Letter of Intent (LOI) by the Sri Lankan authorities to build and operate a new deepwater container terminal in Colombo Port, which is regarded as the largest-ever foreign direct investment in the country.

The company witnessed a reduction in revenue from the power generation sector due to the reduced demand for thermal power, on account of increased rainfall experienced by the country during the quarter.

Driven by expansion seen in the inward remittances market, MMBL Money Transfer, a subsidiary company, reported growth in the income generated.