Sri Lanka’s Aitken Spence records PBT of Rs. 8.5 billion for 1H with a quadruple-digit growth over FY22.
Daily FT: The diversified blue-chip Aitken Spence PLC has reported a profit before tax of Rs. 8.5 billion for the six months ended 30th September 2022.
This is an exponential quadruple-digit growth compared to Rs. 266.7 million recorded for the same period during the previous year, the Company said in a statement.
Aitken Spence PLC reached an EBITDA (Earnings inclusive of equity accounted investees before interest expenses, tax, depreciation and amortisation) of Rs. 17.0 billion for the first half of the financial year, which was also 272% higher than the EBITDA of Rs. 4.6 billion recorded during the first half of the previous year
This exceptional performance was driven by the Group’s diverse presence in eight countries spanning sixteen segments of operation. It is noteworthy that these results were achieved in a scenario in which the Group’s finance costs increased by over 150% due to the high interest rates on the rupee and dollar prevailing during the period, compared to the low interest rate regime in the previous year.
The Group secured a revenue of Rs. 43.3 billion for the first half of the financial year, which is a 133.3% growth over the revenue of Rs.18.6 billion recorded for the same period of the previous year. This unprecedented growth in business operations provides a positive indication towards the much-awaited resurgence of the tourism sector.
The Group’s maritime and freight logistics sector contributed the highest sector PBT of Rs. 5.1 billion for the six months with an impressive growth of 188.6%. Enhanced overseas port management operations, the increase in freight rates witnessed industry-wide coupled with the benefit of the foreign currency denominated revenue, were the main reasons for an exceptional performance from this sector. The improved performance across all companies of this sector was commendable.
The Group’s strategic investments sector recorded a PBT of Rs. 4.4 billion driven by a triple digit growth of 703.3% for the six months ended 30th September 2022. The improved performance was driven by the Group’s plantations, printing and packaging and apparel manufacture segments and the sizable exchange gain recorded in the holding company contributed substantially towards this increase in the profits of the strategic investments sector.
During the quarter under review, expanding the Group’s portfolio of renewable energy plants, the Group acquired 100% shareholding in one of the largest utility scale solar farms in the country for a significant investment of Rs. 1.4 billion. This endorses the Group’s commitment to local and global sustainable development goals and towards achieving net zero status.
The Group’s tourism sector showed a significant improvement as they recorded a decrease in losses of 42.5% for the six months ended 30 September, despite the multiple crises that directly impacted the tourism industry. A noteworthy turnaround was witnessed in the Group’s destination management segment and an encouraging recovery from the Group’s overseas hotel segment coupled with the rupee devaluation positively impacted this sector.
The Group’s services sector recorded a 7.9% growth in PBT led by the insurance and property development segments for the six months ended 30 September.
“Our compelling performance for the first six months of this financial year is a reflection of the Group’s ability to transform and show resilience amidst tumultuous economic challenges that continues to prevail. There is much uncertainty, but Aitken Spence will continue to ensure that its business models are sustainable and will enrich our communities and our environment,” Deputy Chairman and Managing Director Dr. Parakrama Dissanayake said.
Aitken Spence is the first conglomerate in Sri Lanka to make a public commitment to the Science Based Targets initiative to achieve net zero emissions and is a frontrunner in the renewable energy space in Sri Lanka providing 1.2% of the country’s peak energy demand through renewable sources. The organisation pioneers change in the diverse industries that it operates in and remains committed to transform the future.
Listed in the Colombo Stock Exchange since 1983, Aitken Spence is anchored to a heritage of excellence spanning over 150 years and driven by a team of over 12,500 across 16 industries in eight countries: Sri Lanka, Maldives, Fiji, India, Oman, Myanmar, Mozambique and Bangladesh.
The growth in profits recorded by Sri Lanka’s Aitken Spence despite the challenging economic conditions in the country is indicative of the strength of the country’s private sector as well as the overall resilience of Sri Lanka’s economy. Many private sector businesses have recorded impressive profits even amidst a financial crisis. Sri Lanka’s economy has shown great resilience through the years and is once again on the path to recovery after facing challenges posed by the global pandemic and its ensuing impact that caused a financial crisis in the country. However, several key economic sectors like the manufacturing and export sectors have also shown their strength and resilience by posting profits even during a challenging time. Sri Lanka continues to work towards becoming an emerging business destination in the South Asian region. The country’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country have helped Sri Lanka in building economic resilience. The country’s economic activities in many key areas are once again on the path to expansion opening up many opportunities. Foreign businesses/investors could explore these new opportunities given the growth and business potential of Sri Lanka’s economy. They could also look at forming partnerships or joint ventures with local businesses in order to expand operations locally and internationally.
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