Spence 1H pre-tax profit up 27% to Rs. 1.56 b

Aitken Spence Plc yesterday reported a consolidated pre-tax profit of Rs. 1.56 billion for the first half, up by 26% over the corresponding period of last year. Profit attributable to shareholders rose by 37% to Rs. 1.05 billion.

For the second quarter pre-tax profit was Rs. 915.2 million, up from Rs. 744.2 million whilst net profit amounted to Rs. 606.4 million, as against Rs. 470 million in the corresponding period of 2009/10 financial year. This performance included a net profit of Rs. 109 million gained over the sale of shares in Hayleys Plantations for Rs. 280 million. Group revenue for the first half was Rs. 12 billion, up from Rs. 10.7 billion whilst for the quarter it was Rs. 6.2 billion, as against Rs. 5.6 billion a year earlier.

Spence Deputy Chairman and Managing Director J.M.S. Brito in a statement said: “Our hotels sector performed significantly better during the period under review, driven primarily by our properties in Sri Lanka.

We were also able to improve the profits from our chain of resorts in the Maldives.”

 “In addition to our active involvement in the expansion of the Port of Colombo, we are moving ahead with major investments in tourism and several other sectors of the country. With an enabling environment for the private sector to invest, Sri Lanka can expect sustained levels of high growth,” he added.

Tourism sector posted a pre-tax profit of Rs. 219.6 million as against the loss of Rs. 154.6 million in the first half of last year. Strategic investments improved from Rs. 726.5 million to Rs. 783 million

Cargo logistics saw pre-tax profit decline from Rs. 322 million to Rs. 281 million whilst the services sector saw its figure decline to Rs. 279 million from Rs. 338.5 million.

Spence’s earnings per share rose by 37 per cent to Rs. 38.65 for the six months while the Group Revenue increased by 11.6 per cent to Rs. 11.92 bn. The Company on 25 October had redeemed unquoted debentures worth Rs. 288 million as well.

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

During the period under review, the Ministry of Ports and Aviation and Sri Lanka Ports Authority granted the Aitken Spence-China Merchants Holdings International consortium the letter of intent to design, build, operate and transfer a new deep-water container terminal in Colombo Port following Cabinet approval.

Aitken Spence announced in September 2010 that it signed an agreement with the well known luxury resort operator Six Senses group to establish the first Six Senses property in Sri Lanka as a 50:50 joint venture at a cost of approx. USD 40 mn.

 “The company’s ability to attract a globally acclaimed brand in up-scale sustainable tourism to invest in a major project in Sri Lanka would greatly help Sri Lanka attract similar brands to the island and establish itself as a high-end destination that offers a sustainable tourism product,” Brito added.

With the view to expanding its Container Freight Station activities in order to cater to the expected demand the Company acquired a 46,000 sq. ft. state-of- the-art Container Freight Station facility during the period under review.

On 5 October 2010 the Company subdivided its shares on the basis of 1 ordinary share into 15 ordinary shares. Consequent to the subdivision the number of ordinary shares of the Company increased from 27,066,403 to 405,996,045, without any change to the Stated Capital of the Company of Rs. 2,135 million.

During the six months under review Spence paid an interim dividend of Rs. 3.50 and a final dividend of Rs. 6.50 per share for the year ended 31 March 2010. The total dividend payment for the year ended  31 March 2010 amounted to Rs. 270,664,030.