Sri Lanka’s Aitken Spence Q1 EBITDA sees 111% surge
The Morning: Aitken Spence PLC reported an EBITDA (earnings before interest cost, tax, depreciation, and amortisation) of Rs. 4.3 billion for the first quarter of 2024/25, a triple digit growth of 111% over that of the first quarter of the previous year.
The Group achieved a steady profit-before-tax (PBT) of Rs. 575.8 million in the first quarter of 2024/25, which was a significant turnaround from the loss recorded in the previous year.
The Group’s tourism sector recorded an EBITDA of Rs. 1.7 billion, followed by the Group’s maritime, freight and logistics sector which recorded an EBITDA of Rs. 1.2 billion.
The Group’s strategic investments sector demonstrated a stable performance during the quarter whilst the Group’s services sector was slightly hampered by multiple factors.
The Sri Lankan hotels segment and majority of the overseas hotels saw an improvement in occupancy levels which is encouraging.
However, the Sri Lankan rupee appreciation during April 2024 had a subdued impact on the Group’s destination management segment.
The slight dip in freight rates and the impact of the exchange rate affected the performance of the maritime, freight and logistics sector.
The stronger operational performance of the Group’s hydro power companies and the waste to energy power plant together with the recovery of long outstanding dues from the sole off-taker made a positive impact on the Group’s strategic investment sector.
OSL take:
The growth and profits recorded by Sri Lankan businesses amidst challenging economic conditions witnessed by the country during the past few years is indicative of the strength and resilience of the country’s private sector as well as the overall resilience of Sri Lanka’s economy to internal and external challenges. The surge in earnings by businesses like Aitken Spence further proves that Sri Lanka presents an ideal business destination in the South Asian region. The overall economic expansion in Sri Lanka at present has also helped local businesses while opening up business/investment opportunities in key economic sectors in the country. Given the increasing interest shown by foreign businesses/investors to explore opportunities in Sri Lanka, they could also look at the possibility of forming partnerships or joint ventures with local businesses in order to further expand operations locally and internationally. With Sri Lanka further strengthening and expanding its trade ties with other countries, foreign businesses/investors could also look at setting up bases in Sri Lanka to engage with other countries in the region using the preferential treatment enjoyed by Sri Lanka with countries in the region.