Aitken Spence PLC announced yesterday posting of Rs 744mn as pre-tax profit and Rs 470mn as profit attributable to shareholders for the quarter ended 30th September 2009; both increasing by 16% 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% and 3.6% respectively. Earnings per share increased 16% from Rs 14.97 to Rs 17.37 for the quarter while it dropped by 3.6% 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 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 we believe may facilitate improved returns in the future.

The Maritime sector revealed a better performance over last year despite a challenging operating environment.  Its port management and container services operations in South Africa maintained strong earnings. The company also stated that negotiations are ongoing with the government and the Aitken Spence-China Merchant Holdings Consortium regarding the tender for the development of the South Container Terminal of the Colombo Port expansion project.

In September, Aitken Spence announced the latest addition to its portfolio of hotels in India with the opening of “Tamara” in Coimbatore.  It now operates 25 hotels and resorts in Sri Lanka, Maldives, India and Oman.

“We intend to expand and strengthen our presence in Sri Lanka, especially in the hospitality sector. The former Neptune Hotel will be transformed into a wellness resort based on Ayurveda under our Heritance brand umbrella. We are partnering with Six Senses to build an up-market luxury resort in Ahungalla. We also have plans to develop the prime beach property we own in Trincomalee”, said Mr. J M S Brito, Deputy Chairman/Managing Director of Aitken Spence PLC.

The easing of interest rates during the recent past has been a welcome relief to the corporate sector. Further reduction in interest rates is expected in the near future and would have a beneficial impact on operating margins of the company.

During the period under review, Aitken Spence Travels and the TUI Service Team in the country were recognized by TUI for overall service performance to its guests during Winter 2008/09 season, by winning the third place globally among small destinations. TUI is the world’s largest integrated tourism group represented in Sri Lanka by Aitken Spence for over three decades.

Aitken Spence is among Sri Lanka’s leading and most respected corporate entities with interests in Hotels, Services, Logistic Solutions and Strategic Investments in South Asia, the Middle East and Africa.