Aitken Spence 2Q profit up 50% to Rs. 540 m

Saturday, 5 November 2016 00:21 - - {{hitsCtrl.values.hits}}

Aitken Spence PLC said yesterday it posted Rs. 540 m as profits attributable to equity holders of the company in the second quarter, an increase of 50% year-on-year.

Pre-tax profits rose by 26% to Rs. 973 m while revenue rose by 70% to Rs. 9.8 b, in the second quarter from last year. Earnings per share for the quarter was Rs. 1.33, an increase of 50% over the corresponding period.

The Company statement said increase in revenue during the quarter from the tourism sector was mainly driven by new additions, Al Falaj hotel (Oman), Turyaa Chennai (India) and the new wing of Turyaa Kalutara. Resumption of operations at the Company’s thermal power plant contributed to the increase in revenue from the Strategic Investments sector, while the new segments in the freight and port management activities contributed to the increase in the Maritime and Logistics sector revenue. The diversified Group’s six months results reflected profits attributable to equity holders of the company at Rs. 789 m and pre-tax profits at 1.45 b. Six-month revenue increased by 50 % to Rs. 17.38 b, while earnings per share for the same period stood at Rs. 1.94.

Operations of the Group’s thermal power plant recommenced in April this year following a lapse of one year, now contributing to a more stable national power generation effort. The Group has made substantial investments over the years to establish a portfolio of thermal, wind, hydro and especially renewable energy production, and expects growth in this area of engagement both in the local and foreign markets. The interest in renewable energy has been worked into the Group’s sustainability initiatives and continues to be a key priority in the envisioned future of the Group involvement in the power sector.

The tourism sector whose lion share is represented by the Group’s chain of resorts spread across four countries faced a challenging quarter. The interest and start-up costs of new hotel projects in Sri Lanka and overseas affected the bottom line of the sector. Closure of a multitude of rooms in a few resorts in the Maldives for refurbishment coupled with lower demand from key source markets negatively affected the returns from the Maldives leisure segment. However, the Company is confident that the Maldives tourism sector would pick up in the short to medium term.

Group’s latest additions to Sri Lanka’s leisure portfolio, Heritance Negombo and RIU Ahungalla were fully operational during the quarter under review. The 500-room RIU hotel in Ahungalla contributed towards the resumption of scheduled charter flights to Sri Lanka from several countries during the winter season of 2016, which will contribute to better results for the rest of the year.

The Maritime and Logistics sector recorded an impressive performance in the quarter with significant increases in the top and bottom lines, strengthened by its maritime services and port management divisions.

An approximate 28% increase in the income tax charge for the Group from Rs. 207 m to Rs. 264 million was recorded for the quarter ending 30 September 2016.