Aitken Spence hopes new political alliance will bring peace

Top Sri Lankan conglomerate Aitken Spence last week reported a sharp 76.5% rise in post-tax profits and in words of encouragement- generally resonating across the land - hoped the agreement between the two main parties would help an early end to the ethnic conflict.

"I sincerely hope the agreement between the two major political forces in the country would help revive the peace talks and help towards bringing an end to the conflict," noted the group's Deputy Chairman and Managing Director Rajan Brito in the half-yearly report.

Financial results for the six months ended 30th September shows the sharp rise in post-tax profits result in a Rs. 969-million over the same period last year.

The group said in a statement that it posted a revenue of Rs. 9.4 billion, for the first half of 2006/07, up 61% from last year. In addition, the blue chip's earnings per share also saw a significant increase of 59%.

Healthy growth was seen from the power generation sector, fuelled by the enhanced stake in Ace Power Embilipitiya, which commenced operations in 2005. Management efforts towards operational efficiencies after take over of the operations and maintenance of the other two plants from the O & M contractors have also contributed to the good results.

A continuing strong performance from the Group's leisure properties in the Maldives has contributed positively towards the financial results.

Its three Sri Lankan hotels also recently continued to set benchmarks by winning the ISO 22000 certification relating to food safety. Consolidating its position as the leader in the Leisure sector, the Group plans to manage and own several hotel properties in some of the most promising tourism hotspots of India, the statement said.

"However, the Group is concerned about the lack luster performance from the local tourism sector which is hampered by the adverse security situation prevailing in the country," it said.

Noteworthy contributions during the reporting period was also made by the Group's logistics arm, operating the single largest container freight station in the country, which continued its expansion drive with additions to its fleet and equipment.

Recently Aitken Spence successfully raised Rs. 2 billion worth of debt by way of a rated debenture and a term loan. The funds raised will be utilized for the leisure sector's expansion in the region as well as to settle short term debt obtained by the Group to increase its stake in the power generation sector and to fund the refurbishments carried out in two of the local properties in the previous financial year.

Brito commenting on the results said, "Our performance has continued to be solid despite the unfavourable conditions for tourism in the country. Our financial strength was reaffirmed by the AA(lka) rating by Fitch Ratings, for our recent debenture issue. Our ability to easily raise funds in the market is a further testimony of the Company's favourable status among investors. "