Aitken Spence achieves 33% growth in 2Q PBT from non-tourism sectors

• Group’s new iconic venture Sri Lanka’s first waste-to-energy project with Rs. 13 b investment to commence operations by end-2020

Chairman D.H.S. Jayawardena

Deputy Chairman and MD Dr. Parakrama Dissanayake

Aitken Spence Plc’s non-tourism sectors have reported a Profit-Before-Tax (PBT) of Rs. 1.13 billion in 2Q, a growth of 33% compared to the previous year in the midst of challenging economic conditions.

These sectors also reported an EBITDA (Earnings Before Interest Expense, Tax, Depreciation and Amortisation) of Rs. 1.59 billion prior to the impact of forex compared to 2Q of previous year, Aitken Spence said in a statement. 

The Group’s non-tourism sectors continued their positive performance since commencement of full operations after the lockdown in May 2020. The non-tourism sectors include companies in the plantations, renewable energy, maritime and freight logistics, apparel, insurance, elevator agency, printing and packaging, money transfer and maritime education and management segments. 

The Group’s new iconic venture, Sri Lanka’s first waste-to-energy project with an investment of Rs. 13 billion will commence operations by the end of the year, overcoming all setbacks experienced due to the COVID-19 pandemic. This project will provide a sustainable solution to the Colombo city’s waste management problem whilst adding renewable energy to the country’s energy profile. 

The Group’s plantation segment recorded an excellent performance during the quarter with a profit growth of over 140%. The maritime and freight logistics sector also performed remarkably to record a 17% increase in profits for the period. The apparel manufacturing segment delivered a six-fold growth in profits whilst the printing and packaging segment recorded a turnaround during the quarter. Further outstanding performances were seen from the insurance, elevator agency, and money transfer segments in the services sector that recorded a profit growth of 35%. 

The statement said the Group’s tourism sector EBITDA for 2Q was a loss of Rs. 940 million since it was largely affected by curtailments in international travel that impacted the Group’s destination management, hotels and airline GSA. However, these companies commenced operations post-lockdown by serving the local customers and introduced new and exciting experiences to serve this clientele. By offering customised excursions with unique experiences to the local market, the destination management segment of the Group handled nearly 9,000 local clients during the quarter.

With the easing of the lock down restrictions, Aitken Spence Hotels in Sri Lanka commenced operations in the second quarter catering to the local clientele. All hotel properties were highly patronised and recorded satisfactory occupancy levels throughout the quarter. Due to the second wave of COVID-19 in October, operations have once again been curtailed; however, it is hoped that a new-normality will prevail with the implementation of all required health protocols.

Most of the hotels and resorts representing the Heritance and Adaaran brands in the Maldives commenced operations and are seeing an upward trend in the bookings. Maldives as a destination has attracted over 40,000 tourist arrivals since the opening of the country to international traffic post COVID-19 lockdown. Turyaa Chennai and Al Falaj Oman, remains operational throughout the period recording moderate occupancy levels and food and beverage revenue through the domestic traffic secured by these hotels.

Aitken Spence Group recorded an EBITDA of nearly Rs. 600 million for both tourism and non-tourism sectors for the Quarter. The Group recorded a loss from operations of Rs. 0.8 billion for the second quarter compared to the profit from operations of Rs. 1.1 billion recorded in the same quarter of the previous year. The Profit-Before-Tax (PBT) for the second quarter was a loss of Rs. 1.3 billion compared to a profit of Rs. 0.7 billion in the previous year.

“We remain hopeful for a faster recovery in the Group than achieved during the second quarter,” Aitken Spence Plc Deputy Chairman and Managing Director Dr. Parakrama Dissanayake said. 

“The wider group of companies in the plantations, renewable energy, maritime and freight logistics, apparel, insurance, elevator agency, printing and packaging, money transfer and maritime education and management performed exceptionally well which was beyond our expectations. This is reassuring as it shows strong resilience despite the setback in the tourism industry,” Dr. Dissanayake added.

Listed in the Colombo Stock Exchange since 1983 and marking its 150th year milestone in 2018, Aitken Spence is a blue-chip conglomerate with a strong regional presence across nine countries, in hotels, travels, maritime, freight and logistics solutions, plantations, power generation, insurance, printing, apparel and other services.