Aitken Spence reports robust performance; EBITDA up 10.4% to Rs. 8.9 b in 1H

Chairman D.H.S. Jayawardena

Joint Deputy Chairman and Joint Deputy Managing Director Stasshani Jayawardena

Deputy Chairman and Managing Director Dr. Parakrama Dissanayake

Aitken Spence PLC, a leading conglomerate with a diverse regional presence, has reported an EBITDA (excluding impacts from foreign currency exchange gains and losses) of Rs. 8.9 billion for the six months ending 30 September 2024, reflecting a growth of 10.4%. 

EBITDA includes earnings from equity accounted investees; however, excludes interest expenses, tax, depreciation, and amortisation. The Group’s profit from operations (excluding forex) improved significantly by 38.7% from Rs. 2.5 billion to Rs. 3.5 billion for the six months ending 30 September 2024.

The Group’s Maritime and Freight Logistics sector reported a Profit Before Tax (PBT) of Rs. 2.3 billion for the six months ending 30 September 2024. 

This performance was affected by a decline in business volumes and exchange rate fluctuations.

The Group’s Strategic Investment sector achieved a PBT of Rs. 728 million, reflecting a growth exceeding 100%. This impressive performance for the first six months of the year was largely driven by the improved results of hydropower companies and the settlement of previously delayed interest received by the other companies within the Group’s renewable energy segment.

The Group’s Tourism sector demonstrated a notable improvement, recording a decrease in losses of 36.9% for the six months ending 30 September 2024. The hospitality segment benefitted from increased occupancy rates and higher average room rates, leading to better results for local hotels compared to last year.

However, the destination management segment faced several challenges this period. Macroeconomic factors, including the re-introduction of an 18% VAT on the sector, which could not be added to previously contracted rates with tour operators, significantly impacted results. Additionally, the ongoing conflicts in the Red Sea adversely affected cruise tourism and charter flights from Eastern Europe, further affecting the segment’s performance.

The Group’s Services sector recorded a loss of Rs. 52.1 million, primarily due to increased costs in the elevator segment, driven by additional costs incurred on the accelerated completion of several high-rise buildings in Colombo. Additionally, the sector was affected by a lower exchange rate on remittances in the money transfer business.

During this period, the Group’s PBT (excluding forex) of Rs. 1.5 billion saw a remarkable improvement, recording a complete turnaround from the loss of Rs. 1.2 billion recorded in the previous year.

The Group remains committed to environmental, social, and economic sustainability. Led by Executive Director Dr. Rohan Fernando and reporting to both the Group Supervisory Board and the Main Board, the Group formed a Sustainability Council, comprising of Sectoral Managing Directors and C-Suite officials, to oversee sustainability-related targets, KPIs, and decisions. During the quarter, the Council was sensitised on the IFRS S1 and S2 standards with external topic experts.

Within the Group’s Disaster Risk Reduction strategy, the Group conducted its first earthquake drill and night-time fire drill at Aitken Spence Towers. 

The Group also updated dashboards on its data management platform to monitor non-financial performance indicators. The Group’s total energy consumption within the organisation for 2Q at 376,507 GJ saw a 16% increase from 2Q 2023/2024 due to increase in operations within the Tourism and Strategic Investments sectors. Comparatively, the water consumption within the Group in 2Q at 854,243m3 was 34% less than 2Q 2023/2024. More stringent actions are planned to align with the Group’s pathways for net zero and net positive impact goals. 

Further, supporting collaborative efforts of the country, Aitken Spence continued to host the Climate Emergency Task Force meetings of the UN Global Compact at Aitken Spence Towers to encourage fostering the discourse on climate action among businesses. 

In order to create a culture of mentoring, Group HR established a pool of mentors under the ‘Spence Luminary’ banner to guide fellow Spensonians in navigating their careers and realising their full potential. This initiative commenced with a program tailor-made to equip 50 senior leaders with mentoring/coaching skills. Subsequently, an online platform was launched to connect Spensonians across Aitken Spence with potential mentors/coaches.

As part of the Aitken Spence DE&I agenda and ongoing theme #SpenceWomenatWork, 40 female Spensonians in the managerial category were provided the opportunity to follow a leadership development program akin to a mini-MBA, curated by Group HR in collaboration with the Postgraduate Institute of Management (PIM). This focused talent intervention is aimed at upskilling high potential female employees to take up leadership roles in the future, aligned with the Group’s aim to increase the percentage of women in leadership positions to 30% by 2030.

Listed in the Colombo Stock Exchange (CSE) since 1983, Aitken Spence is anchored to a heritage of excellence spanning over 150 years and driven by a team of more than 13,000 across 16 industries in 11 countries: Sri Lanka, Maldives, Fiji, India, Oman, Myanmar, Mozambique, Bangladesh and Cambodia, Singapore, and UAE.