Aitken Spence shows stronger performance in 2Q

Aitken Spence PLC released its second quarter financial results to the Colombo Stock Exchange yesterday, reporting Rs 744mn as pre-tax profit and Rs 470mn as profit attributable to shareholders for the quarter ended September 30, 2009; both increasing by 16 percent over the previous year. The Sri Lanka-based diversified conglomerate’s figures for the first six months revealed a pre-tax profit of Rs 1.23bn and profit attributable to shareholders of Rs 764mn, reflecting marginal declines of 1.2 percent and 3.6 percent respectively.

Earnings per share increased 16 percent from Rs 14.97 to Rs 17.37 for the quarter while it dropped by 3.6 percent to Rs. 28.22 for the six months. During the quarter under review, the Sri Lankan leisure sector, consisting of hotels and inbound tourism, showed signs of recovery. Aitken Spence Hotels, which operates the country’s largest resort portfolio showed improved earnings over the previous year.

Aitken Spence Travels, the largest inbound tourism operator in the country saw tourist numbers increase during the period under review, resulting in higher earnings.

In spite of the earnings remaining negative, the Group’s performance in the Maldives was above expectations. Aitken Spence is the largest international resort operator in the Maldives, with a chain of seven resorts.

The islands are yet to fully recover from a slump in tourist arrivals due to the aftermath of the global recession.

The Aviation sector, consisting of the General Sales Agencies for Singapore Airlines and Kingfisher Airlines has reported losses during the period.

The reduced demand for air travel as a consequence of the global financial crisis which compelled airlines to reduce the number of flights coupled with increased operating costs had an adverse impact on the sector turnover and profitability.

Singapore Airlines has shifted to night flights which may facilitate improved returns in the future, the company believes.