Revenue up but challenging leisure sector at Aitken Spence
View(s):Like most companies with exposure in the leisure sector, Aitken Spence Plc faces challenges despite strong performances by the flagship Heritance Kandalama, Heritance Tea Factory and Heritance Ayurveda Maha Gedara.
The company in a media release said it recorded a steady financial performance for the nine months ending December 2017 with a 14.1 per cent year-on-year growth in profits before tax from Rs. 2.8 billion to Rs. 3.3 billion.
Revenue rose by 18.4 per cent to Rs. 36.2 billion from Rs. 30.5 billion in the 9-month time period.
Maldives hotels segment performance has been improving with Heritance Aarah currently under construction, due to open by next winter.
The hotel segment’s profits were boosted by the sale of M.P.S. Hotels (Pvt) Ltd during the period under review. In September 2017, Aitken Spence Hotel Holdings PLC divested its entire holding in its fully owned subsidiary M.P.S. Hotels (Pvt) Ltd that owned Hotel Hilltop in Kandy. The resultant gain on disposal of this investment is reflected under other operating income.
The company said it was optimistic about the fourth quarter performance of the Sri Lankan hotel sector.
During the quarter under review, Aitken Spence signed the waste supply agreement with the Colombo Municipal Council and the power purchase agreement with the Ceylon Electricity Board for its waste-to-energy project in Muthurajawela. This venture would help address two of the key challenges facing urban development in the country, by absorbing 700 tonnes of municipal waste per day and adding 10 megawatts of energy to the national grid. The company expects the project to begin operations in October 2019.
During the nine months under review the maritime and integrated logistics segments performed creditably, strengthened by a stronger performance by the shipping agency businesses, while the freight forwarding segment’s performance faced several challenges and did not perform up to expectations.
The group’s plantations segment represented by Elpitiya Plantations and the elevator agency that represents OTIS in Sri Lanka and the Maldives, recorded improved performances.