Aitken Spence achieves profit landmark midst global turmoil

Aitken Spence PLC reported its highest ever net profit before tax of Rs. 3.4bn and net profit after tax of Rs. 3.1bn for the financial year 2008/09, signifying a growth of 8.4%. The diversified conglomerate’s net profits attributable to shareholders rose 10.8% to Rs. 2.0bn in the year ending March 31, 2009.
The audited annual results of the respected blue-chip released to the Colombo Stock Exchange on Friday, reflected revenue increasing by 6.5% to Rs. 29.3bn. Earnings per share rose 10.8% to Rs. 75.37.
Aitken Spence Deputy Chairman/Managing Director J M S Brito said that the evolution of the company continued during the year under review, despite increasing challenges posed by the global economic environment.
“The Group ended the year on a positive note with its major sectors performing creditably amidst the global turmoil. Our steady momentum can be attributed to an excellent management culture that embraces constructive change, seeking new paths of success while staying focused on our vision” he said.
The company noted encouraging performances in maritime transport, integrated logistics, power, printing and inward remittances during the year while the returns from plantations and garments were below expectations.
In his review, Aitken Spence Chairman D H S Jayawardena displayed confidence in the country’s prospects for next year.
“A peaceful Sri Lanka naturally means a more stable Sri Lanka, devoid of the ravages of conflict and the consequent retardation of economic growth. This is the country’s opportunity – amid the gloom of a global recession, these new events hold incomparable promise for the year ahead”, he said.
While stating that the Group would continue to focus on aggressive expansion in Asia and the Middle East in the year ahead, Mr Brito affirmed the company’s enthusiastic willingness to partner in the development of the North and East.
“We salute the government’s military victories in the North and East. 2009/10 will be a year of unification for the country. We are excited at the prospects for the newly liberated areas and the many opportunities that may arise for Aitken Spence to partner the government and non-government agencies in rehabilitating, reconstructing and developing the North and East”, he said.
Profits from the tourism sector declined mainly due to the slump in tourist arrivals due to the global recession, combined with negative travel advisories and high inflation during the first nine months. The company notes that the encouraging performances in the overseas expansions helped offset losses in Sri Lankan hotels. During the year under review Aitken Spence expanded its hotels portfolio in three countries with the addition of Adaaran Prestige Vadoo in the Maldives, Heritance Madurai, Hotel Athithi in Puducherry in India and Desert Nights Camp in Oman.
The Group’s airline business expanded with the addition of the General Sales Agency for Kingfisher Airlines during the reporting year.
During the year the company’s maritime transport division expanded its operations in South Africa. Aitken Spence announced that it is presently exploring a number of opportunities in the African and Asian continent for maritime services.
Companies belonging to the integrated logistics division showed commendable growth, while the freight forwarding arm experienced narrowing margins mainly due to the pressure of intense competition.
The power division maintained its solid performance this year, while unveiling its future strategic direction in renewable energy. The company’s plantations arm produced disappointing results during the year mainly due to high costs, price volatility and draught. The printing division, which produced improved returns, embarked on a product diversification strategy during the year under review. Aitken Spence’s garments division which operates two manufacturing facilities, declined in demand from its key markets in the USA and UK.
With sustained volumes of transactions, the inward remittances business contributed strongly to Group performance.
The Annual Report announced that the Board of Directors has recommended a final dividend of Rs 6.00 per share. This together with the interim dividend already paid of Rs 3.50 per share, will amount to a total dividend of Rs 9.50 per share. During the period under review, Aitken Spence was recognised as the highest ranked Sri Lankan company at the Best Corporate Citizens Awards organised by the Ceylon Chamber of Commerce.