Aitken Spence 1Q affected by energy sector loss and downturn in Maldives
11 August 2015 02:34 am
Diversified blue-chip conglomerate Aitken Spence PLC’s financial results released to the Colombo Stock Exchange reported a pre-tax profit of Rs.732 million for the first quarter, while the group’s profit attributable to the shareholders of the parent was Rs.420 million, down from Rs.747 million.
The reported revenue for the first quarter was Rs.5.9 billion, down from 9.6 billion, whilst earnings per share for the quarter stood at Rs.1.04.
The 100 MW Ace Power Embilipitiya ceased operations in April 2015 subsequent to the conclusion of the 10-year power purchase agreement with the Ceylon Electricity Board.
The corresponding results for the previous year included the profits from the full operation of the Embilipitiya power plant and insurance proceeds received for the damaged water villas at one of its resorts in the Maldives.
“Although we were keen to contribute to the stability and capacity of the national grid, in line with the growing energy requirement in the country, the authorities did not use the opportunity to secure guaranteed power at a reasonable cost by failing to negotiate a mutually favourable agreement to generate power, from our plant in Embilipitiya,” said Aitken Spence PLC Deputy Chairman and Managing Director J.M.S. Brito.
“Aitken Spence has several large resort construction projects taking place in Negombo, Kalutara and Ahungalla that are expected to add around 750 rooms to Sri Lanka’s tourism sector. The construction of Heritance Negombo and the expansion of The Sands in Kalutara are expected to be completed within the financial year, despite delays. The construction of RIU Hotel in Ahungalla is expected to be completed in the winter of 2016. Turyaa Chennai, the 143-room city property, is awaiting a few regulatory licences to commence commercial operations,” he added.
The tourism sector reported Rs.435 million as pre-tax profits for the quarter. The sector revenue for the quarter was Rs.3.55 billion.
The hotel industry in the Maldives felt the negative effects of the key source markets with arrivals from Russia falling by 40 percent and the Korean market showing a significant drop, during the first financial quarter.
Aitken Spence, which has several resorts in the archipelago, has been adjusting to changing market conditions in the Maldives with several key source markets to the Maldives facing downturns.
The maritime and logistics sector performed well, reporting Rs.214 million with pre-tax profits, while the revenue was Rs.1.85 billion.
Revenue from the strategic investments sector, without accounting for the contribution from the Embilipitiya power plant, was Rs.1.29 billion while the profit-before tax was Rs.86 million.
The reported figures showed revenue at Rs.1.47 billion and the profit-before tax at Rs.23 million. The services sector of Aitken Spence performed commendably with a profit-before tax of Rs.60 million and revenue at Rs.277 million.