Aitken Spence profits grow 12%

Aitken Spence PLC reported its annual unaudited financial results 2013-14 to the Colombo Stock Exchange last week reporting profit attributable to shareholders at Rs 3.7 billion, an increase of 11.7% over the previous year's profit of Rs 3.3 billion.

Profit before tax was Rs 5.4 billion and profit after tax was Rs. 4.5 billion, recording growth of 7.6% and 5.5%. The diversified Group's annual revenue declined marginally to Rs. 36.6 billion while earnings per share improved by 11.7% to Rs. 9.04.

The Group's bottom line was driven primarily by the Tourism sector. Sri Lanka welcomed over 1.27 million tourists during 2013, with a target of 1.5 million set for 2014.

The boom in the tourism industry was reflected in the Group's performance with the revenue of the Tourism sector growing by 9.4 % to Rs. 16.9 billion and profit before tax surging by 26.3% to Rs. 4.4 billion.

Aitken Spence Hotel Holdings PLC, the Group's hotel owning strategic business unit, entered into a shareholders' agreement with RIU Hotels of Spain to build a 500-room luxury resort in Ahungalla, costing approximately US$ 100 million.

The construction of the hotel is due to be launched during the second half of the financial year 2014-15.

Annual revenue for the Maritime Cargo Logistics sector increased 15.3% to Rs. 7.3 billion while profits before tax for the sector increased by 26% to Rs. 709 million.

Entry into a strategic partnership in Fiji for port management services through the acquisition of a 51% shareholding in Port Terminal Ltd - one of the first public-private partnership overseas by a Sri Lankan company was the highlight of the year.

The Services sector reported a revenue of Rs. 819.6 million, a growth of 11.5 %, and a profit before tax of Rs 180.5 million, a growth of 10.2% compared to the previous year.

The Strategic Investments sector reported a year-on-year decrease of 16.1% in revenue to Rs. 15.3 billion, while profit before tax dropped by 81.1% to Rs. 159.8 million primarily due to the Aitken Spence power plants in Matara and Horana not being operational consequent to the cessation of power purchase agreements.

A provision for impairment of approximately Rs. 400 million was made in respect of the remaining assets of these two companies, which dragged down the profits of the sector.

The company disposed of the Horana power plant while the 100 MW power plant at Embilipitiya remained operational, albeit with lower generation due to excessive rainfall during the first nine months of the financial year.

The Group inaugurated a landmark project by investing in a luxury retirement home complex that will comprise 140 villas and associated high-end facilities at a 30-acre site in Negombo.

The project aims at attracting Sri Lankans living overseas who wish to return to their homeland and foreign nationals who wish to retire and live in Sri Lanka.

"The company has delivered consistent results through a combination of strategic foresight and the capacity to transform challenges into opportunities. These qualities have been underpinned by a well-diversified business model that supports the company's growth trajectory," said Chairman D H S Jayawardena.

"Our strategies for the long term and exploration of potential new areas of business factor in the company's responses to some of the future trends," he said.

The Group declared a dividend of Rs. 2 per share, a 33% increase over the previous year subject to approval by the shareholders at the Annual General Meeting.