Aitken Spence records Rs. 488mn as first quarter PBT
Aitken Spence PLC released its first quarter financial results to the
Colombo Stock Exchange today, reporting Rs. 488mn as pre-tax profit, a
decline of 19.4% while revenue fell by 20% to Rs. 5.06 billion over the
The diversified conglomerate attributed the decline as mainly due to
drop in earnings from its Maldivian resorts and the plantations sector,
which resulted in profits-after-tax being reduced by 22.3% and profit
attributable to shareholders amounting to Rs. 293.8 million.
With a chain of seven resorts Aitken Spence is the largest
international resort operator in the Maldives.
The islands attract high-end tourists mainly from Western Europe.
A sharp drop in tourist arrivals to the Maldives due to the global
recession had a negative effect on the tourism sector earnings in the
With aggressive promotions in alternative markets, especially in East
Asia, we hope to further diversify our markets in the future, said J. M.
S. Brito, Deputy Chairman and Managing Director of Aitken Spence PLC.
During the quarter under review Aitken Spence Hotels announced that its
first property, Neptune Hotel will be transformed into a 60 room
wellness resort under its Heritance brand umbrella.
We are vigorously looking at opportunities in all sectors to partner
in the development of the North and East provinces.
Concerted destination marketing and infrastructure development in
targeted tourism hotspots would give reasons for the industry to be
bullish about Sri Lanka's tourism prospects, in spite the recession
curbing global travel, added Brito.
The company's cargo logistics sector which includes maritime
services, cargo, integrated logistics and courier services displayed
improved performance from the previous year.
The Group managed to sustain robust earnings from the port management
& container services operations in South Africa.
Furthermore, a strong performance by the courier division during the
first three months and improved efficiencies across the sector has
resulted in an improved performance in cargo logistics.
Hatton National Bank's profits up by 31%
Hatton National Bank released its first half results for 2009 showing
an impressive 13% growth in the Bank's profit after taxation, which
amounted to Rs. 1.77 Bn.
The Bank was also recognised recently as the 'Best Bank in Sri Lanka'
by Euromoney Magazine for its financial stability and consistent
The Bank recorded a top line growth of 12 % to Rs 19.8 Bn., with main
contribution coming from interest income.
Interest income for the period under review grew by 16% which was
driven mainly by interest from investments in fixed income securities.
Interest expenses also witnessed a 15% increase mainly from the growth
witnessed in customer deposits.
The Net Interest Income for the Bank amounted to Rs. 7.09 Bn
reflecting an impressive 18% growth from the corresponding period last
A drop of 18% was witnessed in income from foreign exchange as a
result of the decline witnessed in foreign trade as well as stringent
regulations imposed for booking forward exchange which resulted in a
significant drop in forward booking of currencies.
Income from investments also depicted a marginal drop of 9% compared
to 2008, due to the absence of the one off dividend amounting to Rs. 225
Mn paid by HNB Securities Ltd., in the second quarter of last year as
part of the restructuring process that took place with the establishment
of the new joint venture investment bank. The cost management
initiatives that were put in place continued to payoff with operating
expenses increasing by just 14% compared to last year. The Bank will
continue to focus on improving productivity and managing cost in its
efforts to reduce the cost to income ratio.
The Bank made Rs. 381 Mn as specific provisions during the period
which is 11% higher than last year. However, a decline in general
provisions was witnessed compared to 2008 as the loan book contracted
during the period under consideration decreasing the general
provisioning requirement, while last year the Bank accelerated its
general provisioning to meet the 1% Central Bank regulation prior to the
deadline of 31st March 2009.
The gross NPA ratio of the Bank increased to 8.7% which was
reflective of the Banking Industry in the Country experiencing a drop in
asset quality in the recent past due to slowdown in economic activity.
However, HNB continues to maintain a high provisioning cover of 56%,
well above the industry average, as a result of prudent provisioning
policies which has enabled the Bank to maintain the net NPA ratio at
The Bank's total tax provision continued to rise this year with value
added tax increasing by 22% and corporate tax rising by 34% compared to
the corresponding period last year.
Allianz Lanka continues healthy growth performance
Allianz Lanka over achieved the company plan in all areas of business
in the 2nd quarter of 2009, posting a General Insurance GWP of Rs 496
million, which is a growth of 48% over figures of the corresponding
period last year.
Underwriting profits as at end June 2009, also increased by a
substantial 358% to Rs. 56 million, which is a remarkable achievement in
a challenging market. The company's Net Profit Before Tax was a record
Rs 90 million, a percentage growth of 219 over the second quarter figure
of Rs 28 million last year.
We are pleased that we have been able to sustain our steady growth
and profitability into our fifth year of general insurance business in
Sri Lanka. We still continue to maintain our Gross Operating Ratio well
below industry norms, which we have maintained since inception,
confirmed CEO Allianz Lanka, Surekha Alles.
The Company attributes its highly commendable performance to the
implementation of several discerning core business strategies and to
selective risk management and underwriting practices.
The success of its General insurance business in Sri Lanka prompted
the setting up of Allianz Life Insurance Lanka in the country in
November last year.
As of the second quarter 2009, the company achieved a commendable
Life Insurance GWP of Rs 40.8 million.
Allianz has since expanded its branch network to the provinces and
now has a strong presence in Kurunegala, Galle and Negombo, where the
company services its rapidly expanding clientele with the same benefits,
facilities and financial security enjoyed by its customers in Colombo.
Plans are also on board to expand to other viable locations including
the North and East in the near future. 'We intend to fully utilise the
business opportunities that have arisen as a result of the opening up of
the North and East to private businesses', explained Mrs. Alles.