During a turbulent financial year that was affected by the unprecedented COVID-19 pandemic, Aitken Spence Group’s non-tourism sectors delivered the highest ever profit before tax of Rs. 5.01 billion for the twelve months ending 31st March 2021 compared to Rs. 4.2 billion last year and partially offsetting the impact of the Group’s Tourism portfolio which recorded its worst year ever due to the devastating impact of the pandemic.
The Group’s non-tourism sectors overcame multiple challenges including business disruptions, health and safety risks faced by the Spensonians and the overall slowing down of economic activity to record a growth in profit before tax of 55% in the 4th quarter and 18.9% in the financial year, compared to the corresponding periods in the previous year.
The Maritime and Freight Logistics sector which has operations across 5 countries contributed 51.2% of the Group’s non-tourism profit before tax by recording Rs. 2.6 billion which is a growth of 13.9% year-on- year. This is despite the overall decline in trade volumes during the year. The cargo general sales agencies represented by the Group performed exceptionally well which benefitted from increased freight rates and innovative marketing efforts. Despite the lower import and export volumes recorded by the country during the year, the Group’s integrated logistics segment witnessed a growth in profits due to strategic shifts implemented in its business activities. It is noteworthy that amidst challenges the sector established new strategic partnerships demonstrating the confidence of the business partners in these companies and the Group.
The Strategic Investments sector was the second highest contributor towards the Group’s performance with a profit before tax of Rs. 2.1 billion which is a growth of 23.3% year-on-year. The country’s first ever waste-to-energy power plant commenced in February 2021 with a healthy contribution during these months of operation. The Group recently invested in three more renewable energy projects, expanding its portfolio in hydropower in the pursuit of meeting rising energy demands, sustainable development, access to clean energy and lowering the national carbon footprint. The Group’s investment in plantations provided a substantial boost to the overall earnings of the sector recording its highest ever profit from inception due to its balanced portfolio of diversification.
The Services sector performance was commendable recording a profit before tax of Rs. 392 million which is a growth of 31.8% year-on-year. The Money transfer segment responded to a change in customer needs by facilitating a door-step delivery solution with no additional cost and a direct to bank facility, which resulted in an increase in remittances handled and a record year of performance for the business unit. The Insurance segment was able to record a marginal increase in profitability compared to the previous year through innovative solutions despite the challenges posed by the pandemic. The Elevators segment had an improved year, to record a profit for the year despite the temporary slowdown in the construction industry.
The Tourism sector was worst affected as border closures brought international tourism to a halt. The Tourism sector recorded a sharp decline in revenue from which the sector is still recovering due to the recurrence of the pandemic in source markets despite the roll out of vaccines. Notwithstanding these setbacks, Heritance Kandalama, Sri Lanka, and Heritance Aarah, Maldives belonging to the Group’s Heritance Hotels and Resorts cluster was the only Sri Lankan hotel chain to be recognised at the Condé Nast Traveller Readers’ Choice Awards Middle East 2020. Moreover, Aitken Spence Travels became one of the first Destination Management Companies (DMCs) to be awarded the ‘Safe and Secure’ Tourism Certificate of Compliance by the Sri Lanka Tourism Development Authority (SLTDA).
The Group led the revival of the tourism sector in Sri Lanka and significantly contributed towards the recovery through facilitation of the first of the charter flights to Sri Lanka since the reopening of the airports on 21st January 2021, from unconventional markets such as Kazakhstan. The Group accounts for over 35% of the total arrivals to Sri Lanka from the date of reopening of airports to the end of the financial year. The resorts of the Group in the Maldives recorded a promising revival with the gradual reopening of the resorts from the third quarter of the financial year, with the segment recording a profit from operations for the fourth quarter.
Overall, the Group recorded a loss before tax of Rs. 2.8 billion with the tourism sector reporting a loss of Rs. 7.8 billion for the year. Nevertheless, the Group’s resilience despite its large exposure to the tourism sector is commendable at a time when some of the world’s largest tour operators and air lines required Government bailouts in order to keep afloat.
“During yet another challenging year, Aitken Spence has been reinventing its businesses and our priorities are focused on re-strategising our operations and business models while strengthening resilience. With this objective, the Group embarked on a business and process transformation drive across all business segments. Our strategy to realign, reinvent and relaunch has been adopted very well by our motivated Spensonians proving their true grit. We are indeed confident of the capability of our team to take the Group to a brighter future in the new reality that has characterised the current business environment”, commented Dr. Parakrama Dissanayake, Deputy Chairman and Managing Director of Aitken Spence PLC.
Aitken Spence PLC won the highest number of awards received by a single company at the Best Corporate Citizen Sustainability Award 2020 and the only company that has been ranked among the Top 10 Best Corporate Citizens in Sri Lanka for an unprecedented 15 consecutive years.
Listed in the Colombo Stock Exchange since 1983 and with a history spanning over 150 years, Aitken Spence is a blue-chip conglomerate with operations in 16 diverse segments in 8 countries: Sri Lanka, Maldives, Fiji, Mozambique, India, Oman, Myanmar and Bangladesh.
People’s Bank celebrates 75 years of Independence by offering gifts to newborns
People’s Bank celebrated Sri Lanka’s 75thNational Independence at a modest ceremony held at their Head Office which was followed by a series of island wide initiatives.People’s Bank’s ‘Birth of Freedom’ programme which commences on every Independence Day was carried out this year as well. Under this concept, People’s Bank gifts Rs.2,000/- worth of an ‘IsuruUdana’ Gift Certificate to every baby born between the 1st and 14th of February.
People’s Bank launched this programme in 2006 with the vision of instilling national pride and encouraging parents to plan for their children’s future. Parents can open an ‘Isuru Udana’ Children’s Savings Account at any People’s Bank Branch using the Gift Certificate.
Director of the Castle Street Maternity Hospital Dr. Ajith Danthanarayana, Director of De Soysa Hospital for Women in Borella Dr. Pradeep Wijesinghe, People’s Bank Senior Deputy General Manager (TB & OCS) Rohan Pathirage, Deputy General Manager (Retail Banking) Renuka Jayasinghe, Deputy General Manager (Strategic Planning, Performance Management & Research) Jayanthi Kurukulasooriya, Deputy General Manager (Risk Management) Roshini Wijerathna, Deputy General Manager (Banking Support Services) Nipunika Wijayaratne, Deputy General Manager (Channel Management) T.M.W Chandrakumara, Head of Marketing Nalaka Wijayawardana, Assistant General Manager (Retail Banking) Nalin Pathiranage, Assistant General Manager (Human Resources) Manjula Dissanayake, Colombo North Regional Manager S.L.M.A.S Samarathunga, Colombo South Regional Manager M.S Kanakka Hewage, Borella Branch Manager W.A.N Udayangani, Town Hall Branch Manager Tiral Pradeep, Deputy Director of De Soysa Hospital for Women in Borella, Dr. K.M Nihal, Administrative Officer of Castle Street Hospital for Women S.M.T.A.R. Bandara, Nursing officers along with hospital staff were also present at the event.In line with the above all People’s Bank branches across the country initiated ‘Nidahase Upatha’ activities island wide.
Norlanka Manufacturing Trincomalee receives LEED Gold Certification
Norlanka Manufacturing Trincomalee was recently awarded the prestigious LEED Gold Certification (Leadership in Energy and Environmental Design).Norlanka, one of Sri Lanka’s largest sustainable exporters of baby and kidswear, has an extensive ESG (Environmental/Social/Governance) strategy and understands the responsibility it has concerning the future of a sustainable apparel industry. Therefore, ethical sourcing, in particular working with responsible supply chain partners has been a critical operational necessity.
The LEED certification is a globally recognized symbol of sustainability achievement, and it is backed by an entire industry of committed organizations and individuals paving the way for market transformation. It’s awarded for projects that have earned points by adhering to prerequisites and credits that address carbon, energy, water, waste, transportation, materials, health and indoor environmental quality. Buildings consume energy and resources at an alarming rate, therefore the LEED rating system is the most widely used green building rating system, as it provides a framework for healthy, efficient, carbon and cost-saving green buildings.
LEED takes multiple areas into account with varying sub-criteria when certifying a building such as location, transportation, sustainability of the site, construction, water efficiency, energy and atmosphere, materials and resource, waste management, indoor environment quality, innovations and more.
Chief Innovation Officer of Norlanka, Buddhi Paranamana stated, “This LEED Gold certification is a testament to our constant drive to improve our sustainability efforts. This award marks yet another milestone in Norlanka’s journey towards becoming carbon neutral by 2025. Since 2010 we’ve constantly been learning how to do things in a more sustainable way. I would like to congratulate our team for obtaining this certification. It showcases dedication towards achieving sustainable excellence while achieving our goals and providing customers with high-quality products.”
SL bondholders ready for debt restructuring talks with authorities– with conditions
Sri Lanka’s bondholders have told the International Monetary Fund (IMF) that they are prepared to engage with Sri Lankan authorities in debt restructuring talks consistent with the parameters of the global lender’s program.The Ad Hoc Group of Sri Lanka bondholders conveyed its stance in a letter directed to IMF Managing Director Kristalina Georgieva on Friday (Feb. 03).
“The Bondholder Group through its Steering Committee stands ready to engage quickly and effectively with the Sri Lankan authorities to design and implement restructuring terms that would help Sri Lanka restore debt sustainability and allow the country to re-gain access to the international capital markets during the IMF Programme period.”
The Bondholder Group acknowledged the Sri Lankan authorities’ engagement with their official creditors towards a resolution of the current crisis and restoration of debt sustainability.
The Bondholder Group further acknowledged that such engagement has recently resulted in the Indian government delivering letters of financing assurances to the IMF, committing to support Sri Lanka and contribute to its efforts to restore debt sustainability by providing debt relief and financing consistent with the IMF Extended Fund Facility Arrangement and the IMF Programme targets indicated in the India’s letter to the global lender.
Sri Lanka Bondholder Group Letter to IMF stated:
Based on the limited information available to us at this time, including information contained in the India Letter, we understand that the IMF Programme’s debt sustainability targets are identified as (i) reducing the ratio of public debt to GDP to 95% by 2032, (ii) limiting the central government’s annual gross financing needs to GDP ratio to 13% in the period between 2027 and 2032, and central government annual foreign currency debt service at 4.5% of GDP in every year between 2027 and 2032 and (iii) closing of the external financing gap.
The Bondholder Group hereby confirms it is prepared to engage, through its Steering Committee, with the Sri Lankan authorities in restructuring negotiations consistent with the parameters of an IMF Programme and the targets specified therein (the “IMF Programme Targets”), which the Bondholder Group understands to be the targets identified in the India Letter; it being recognized that these negotiations will necessarily be further informed by the receipt of the forthcoming DSA. We would note that the finalization of an agreement will also be subject to the satisfaction of the following conditions:
The central government’s domestic debt – defined as debt governed by local law – is reorganized in a manner that both ensures debt sustainability and safeguards financial stability. Assuming that annual gross financing needs should not exceed 13% of GDP in the period between 2027 and 2032, whilst allowing for central government annual foreign currency debt service to reach 4.5% of GDP in every year between 2027 and 2032, domestic gross financing should therefore be limited at 8.5% of GDP for the period 2027-2032.
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