Aitken Spence FY16 pre-tax profit down 33% to Rs. 3.8 b

• Challenging year sees bottom line dip 43% to Rs. 2 b; Group revenue down 25% to Rs. 26 b
• Optimistic on future, invests Rs. 12.8 b in new ventures and capital assets

Aitken Spence Plc yesterday reported lower performance in FY2016 owing to challenging times in comparison to a year earlier.

Group revenue was down by 25% to Rs. 26 billion whilst pre-tax profit was lower by 33% to Rs. 3.8 billion. Net profit attributable to equity holders was down 43% to Rs. 2 billion.  

“The past year has been a challenging one for the group, attributable to a number of factors including the cessation of the power agreement with the CEB, a slowdown in the national economy, disappointing performance in the Maldivian hotel sector and foreign exchange losses in a number of overseas investments,” Aitken Spence Chairman D.H.S. Jayawardena was quoted as saying in a company statement.

“However, we have proactively positioned ourselves for exponential growth in the medium and long term through strategic investments,” he added.

The statement said the conglomerate followed through on its strategy of investing in the medium and long term future amidst a challenging operational climate, by investing Rs. 10 billion on new ventures both local and overseas and a further Rs. 2.8 billion on property, plant and equipment.

The tourism sector recorded a growth of 1.9% in revenue to Rs. 17.2 b, while the Maritime and Logistics, and Services sectors reported revenues of Rs. 8 b and Rs. 1.1 b respectively, which grew by 6.9% and 5.5% respectively over the year. The Strategic Investments sector revenue dropped mainly due to the cessation of the power purchase agreement of the 100MW thermal power plant at Embilipitiya.

Aitken Spence PLC reported a profit attributable to shareholders of Rs. 2.03 b while earnings per share stood at Rs. 4.99.

The focus on meeting the tourism boom in the country has marked a theme for the year’s operations. The Group unveiled its newest hospitality offering – Heritance Negombo, an iconic 139-room property in the heart of the coastal city. Furthermore, the Sands Kalutara, was refurbished and rebranded as Turyaa Kalutara with an expansion of 90 rooms while the existing 110 rooms were upgraded and refurbished in order to command a strong position in the 4-Star plus segment.

Aitken Spence Hotels also became the first Sri Lankan hotel company to purchase a hotel in the Middle East with its acquisition of Al Falaj, the popular four-star hotel in Oman’s capital, Muscat.

During the previous financial year and the beginning of this financial year the Group invested on two new islands – Aarah and Raafushi. Construction has begun on a 150-roomed five star property on Aarah, which is due for launch in winter 2017, while plans are being finalised for a resort on Raafushi. The acquisitions will further strengthen the Group’s presence in the Maldives, where Aitken Spence is presently the largest international hotel operator with four renowned properties.

Aitken Spence Travels followed suit achieving a landmark 129,000 arrivals, the highest inbound volume handled by a single operator, an optimistic upturn for the group’s future focus on the sector and ‘Destination Sri Lanka’ at large.

“We are approaching a momentous milestone of completing 150 years in business since the formalised beginnings of the group. We have succeeded in staying relevant and agile throughout the decades, while transforming ourselves to meet the challenges of the macro environment. Throughout our entrepreneurial journey, our priority has been to maintain sustainability and responsibility in all of our practices. In light of the challenging operating environment we are experiencing at present, we have adopted a lean management style and made key investments for the medium and long term future. I’m optimistic about the future that we invest continuously in,” said Aitken Spence Deputy Chairman and Managing Director J.M.S. Brito

Aitken Spence invested approximately $ 16 million to acquire a 20% equity stake in Fiji Ports Corporation Limited, the regulator of the ports sector in Fiji and the owner of the infrastructure of all major ports in Fiji.

Listed in the Colombo Stock Exchange since 1983, Aitken Spence is a blue chip conglomerate with a strong regional presence in the Hotels, Travels, Maritime Services, Logistic Solutions, Plantations, Power Generation, Financial Outsourcing, Insurance, IT, Printing and Apparel sectors.