Aitken Spence records a strong EBITDA of Rs. 30.1 billion with a growth of 30.3% for FY23
The leading blue-chip conglomerate, Aitken Spence PLC reported an impressive EBITDA (earnings inclusive of equity accounted investees, before interest expenses, tax, depreciation, and amortization) of Rs. 30.1 billion with a growth of 30.3%, showcasing the contribution from all sectors for the year ended 2022/2023. It is noteworthy that excluding foreign exchange gains, The Group’s EBITDA recorded a growth of 77.0%.
The Group’s Profit from Operations for the year witnessed a 15.8% increase, rising from Rs. 16.4 billion to Rs. 19.0 billion. Furthermore, during the financial year that ended 31st March 2023, the Group’s Profit from Operations, excluding foreign exchange gain, recorded a substantial growth of 85.2% over the previous year.
The Group reported a profit before tax of Rs.11.2 billion which was a decline of 21.3% for the year ended 31st March 2023. This was primarily influenced by the decrease in foreign exchange gains compared to the previous year and the steep increase in interest costs due to the high interest rates that prevailed throughout the year. However, when adjusted for foreign exchange gains, profit before tax exhibited a growth of 31.9% for the year ended 31st March 2023. This adjusted measure offers a fairer assessment of performance, considering the extreme volatility of the exchange rate witnessed during the last financial year.
The Group’s strategic emphasis on geographical diversification has yielded fruitful outcomes, as evidenced by the overseas sector’s substantial contribution of over 60% to the Group’s profit before tax. During the reviewed year, the Maritime & Freight Logistics Sector emerged as the leading contributor to the Group’s profitability, accounting for 69.8%, followed by the Tourism Sector with a contribution of 20.8%, the Strategic Investments Sector with 4.8%, and the Services Sector with 4.6%. The remarkable growth of the Maritime & Freight Logistics Sector played a pivotal role in bolstering the overall performance of the Group. All five segments within this sector demonstrated their strength and resilience by making positive contributions.
Furthermore, the Group’s performance received significant boosts from segments such as apparel manufacturing and the hotels segment in the Maldives. By implementing targeted marketing strategies and making strategic adjustments, Turyaa Chennai underwent a substantial transformation in its performance, leading to the hotel achieving a profit before tax for the first time in its history.
Improved results of the Plantation segment also contributed positively towards the Group’s performance. This is despite recognising a substantial increase in deferred tax liability due to the increase in income tax rates, particularly in the plantation and hotel sectors. The excessive delays faced in the settlement of dues from the Government in the power generation segment is causing a strain on the Group’s finances with unwarranted finance cost being borne by the sector. Despite this Aitken Spence has been operating its 10MW waste-to-energy power plant based in Kerawalapitiya as halting operations would mean that the country’s Colombo District will once again be faced with a severe garbage crisis that could potentially lead to social and environmental problems.
The Group faced a significant challenge due to the fluctuation of foreign exchange rates. The profitability of the Group was adversely impacted by a considerable increase in interest expenses, which had a negative effect on capital-intensive segments like the hotels segment and the power generation segment, which heavily rely on borrowings to finance their infrastructure.
“Our foresight and insightful outlook and astute decision-making have led us to make strategic investments in foreign exchange-generating businesses. This long-term vision has proven to be remarkably advantageous during the challenging year, as these investments have played a crucial role in ensuring uninterrupted operations across all business segments within our Group. By taking a diligent approach to growth, we ensure that any expansion initiatives are well-suited to the Group and have the potential to contribute positively to the socio-economic development of our country”, commented Dr. Parakrama Dissanayake, Deputy Chairman and Managing Director of Aitken Spence PLC.
Other key highlights during the financial year 2022-2023
Acquisition of a solar power plant, adding 10MW to the renewable energy generation capacity at an investment of Rs. 1.4 billion. Presently, the Group contributes to providing for just over 1.4% of the country’s peak energy demand with renewable energy.
Invested in a joint venture for freight forwarding in Cambodia, further expanding its geographical footprint.
Commenced construction of a 100,000 sq. ft container freight station at a cost of Rs.1.6 billion. The strategically located facility will significantly expand existing capacity to handle more cargo.
‘Diversity, Equity & Inclusion (DE&I)’ under the theme ‘Freedom to be me’ was launched during the financial year. As a progressive step in this direction, parental leave was enhanced, including the duration of maternal leave been extended to 100 days and the introduction of paternal leave.
Inculcate a culture of innovation to inspire Spensonians to unleash their capacity for innovation and creativity through various initiatives such as SpenceInnova. These ideas designed and developed have been successfully implemented in various business operations.
Voluntary endorsement of the UN Global Compact marked 20 years in May 2022.
Publicly pledged to attain net zero emission status by 2030, becoming signatories to the Science Based Targets initiative (SBTi). These endeavors exemplify the Group’s steadfast commitment to addressing climate change and integrating sustainable practices into its operations.
Listed in the Colombo Stock Exchange since 1983, Aitken Spence is anchored to a heritage of excellence spanning over 150 years and driven by a team of more than 13,000 across 16 industries in 9 countries: Sri Lanka, Maldives, Fiji, India, Oman, Myanmar, Mozambique, Bangladesh and Cambodia.
Healthcare, Consumer and Agri propel Sunshine Holdings’ strong FY23 performance
Diversified Sri Lankan conglomerate Sunshine Holdings (CSE: SUN) recorded resilient revenue growth in a challenging macroeconomic environment, reporting notable top-line growth during the year ended 31 March 2023. Group’s Healthcare and Consumer sectors led growth while healthcare segment remained the major contributor to total Group revenue in FY23.
Sunshine recorded a consolidated Group revenue of Rs.51.9 billion for the year ended 31 March 2023, an increase of 61.3% over last year. Profit after tax (PAT) for the period in review was contracted by 28.0% to Rs. 3.6 billion. The gross profit improved by Rs.3.3 billion, up 31.9% YoY, compared to the previous year, driven by revenue growth. Gross profit margin for the period stood at 26.0%, a contraction of 580 basis points against the corresponding period last year.
The Group’s Healthcare business emerged as the largest contributor to Sunshine’s revenue, accounting for 46.1% of the total, while Consumer Goods and Agri Business sectors of the group contributed 36.6% and 16.9% respectively of the total Group revenue. The Group EBIT closed at Rs. 7 billion, an increase of 23.0% YoY.
Commenting on the results, Amal Cabraal, Chairman of Sunshine Holdings said, “The Group had to face and overcome tough economic factors and adverse market conditions which persisted throughout the year. These headwinds impacted some of the core sectors, and are expected to continue to do so in the short to medium term.”
However, Cabraal highlighted the Group’s commendable response to these challenges, adding, “Through robust cost management initiatives and process reengineering efforts, supported by the integration of digital technologies, Sunshine has delivered a strong performance in FY23. Despite the difficulties, the Group has displayed resilience, and takes an optimistic outlook on fortifying operations to further strengthen overall performance.”
Cabraal further emphasized that “Every possible measure has been taken to ensure business sustainability and continuity in the upcoming months.”
Healthcare sector recorded a revenue of Rs. 23.9 billion during FY23, a significant increase of 36.7% YoY backed by the improved performance in Pharmaceutical, Medical Devices and Manufacturing segments. EBIT for the sector was Rs. 3.0 billion with PAT of the sector increased by 13% YoY. Lina Manufacturing, the pharma manufacturing business, commenced commercial operations in the Metered Dose Inhalers (MDI) plant in July 2022, which was a significant milestone for the business.
Consumer Goods sector reported a 135.6% YoY increase in revenue to close at Rs. 19 billion in FY23. The revenue increase was predominantly driven by the addition of export business. The consumer brands Zesta, Watawala, Ran Kahata and Daintee continued to grow market shares, despite challenging consumer sentiment.
Agribusiness sector revenue increased by 35.4% YoY during FY21/22 to Rs. 8.8 billion, driven by the increase in palm oil NSA. PAT of the Agri sector closed at Rs. 2.3 billion for FY21/22, down by 33.6%.
ADB budget support loan doesn’t elicit positive response from bourse
By Hiran H.Senewiratne
The CSE did not react positively yesterday to the Asian Development Bank’s approval of a US$ 350 million loan as budget support, as part of Sri Lanka’s economic stabilization program, together with the rupee’s appreciation against the dollar, market analysts said.
“The ABD is supporting a series of policy reforms which are required to stabilize the economy and to spur growth. Budget support loans ease cash flows of the government and do not involve imports of goods. This has created some limbo for investors, market analysts said.
Consequently, shares edged- down in mid- day trade and ended on a negative note. The main All- Share Price Index was down by 118.97 points, while the most liquid index S&P SL20 was also down by 41.3 points.
Turnover stood at Rs 516 million without any crossings. In the retail market, top seven companies that mainly contributed to the turnover were, Dialog Axiata Rs 73.7 million (7.2 million shares traded), Lanka IOC Rs 54.42 million (426,000 shares traded), Expolanka Holdings Rs 51.7 million (382,000 shares traded), Prime Lands Residencies Rs 25.1 million (3.11 million shares traded), Browns Investments Rs 21.3 million (4.3 million shares traded), Hemas Holdings Rs 18.8 million (298,000 shares traded) and Elpitiya Plantations Rs 16.2 million (164,000 shares traded). During the day 38.3 million share volumes changed hands in 11000 transactions.
The rupee opened at Rs 296.50 /297.50 against the US dollar in the spot market yesterday, while bond yields were up, dealers said. The rupee closed at Rs 296.00 /297.50 to the US dollar on Friday after opening at around Rs 302.80/303.10.
Sri Lanka’s rupee is appreciating amid negative private credit which has reduced outflows after the central bank hiked rates and stopped printing money.
In the first year of an IMF program, a pegged central bank usually collects reserves and mops up liquidity generated from the purchases or there is a balance of payments surplus.
HNB reopens Student Savings Unit at St. Joseph’s College
Reaffirming its commitment to fostering financial literacy among students, Sri Lanka’s leading private sector bank HNB PLC, announced the reopening of its Student Savings unit at St. Joseph’s College, Colombo.
The reopening comes as part of the bank’s continued efforts to instil the habit of saving among young minds. The event was graced by the esteemed presence of St. Joseph’s College Rector, Rev. Fr. Ranjith Andradi, and the Managing Director/CEO of HNB, Jonathan Alles, Executive Director and Chief Operating Officer Dilshan Rodrigo who are distinguished past pupils of the College, along with Deputy General Manager- Retail and SME Banking Sanjay Wijemanne, Assistant General Manager, Network Management and Business Development Supun Dias and Head Office Branch Chief Manager, Dilanka De Silva.
During the ceremony HNB Managing Director/CEO, Jonathan Alles expressed his delight, stating, “We are extremely pleased to be a part of this momentous occasion, celebrating the reopening of the Student Savings Unit at St. Joseph’s College. Through this Unit, we aim to empower students with a deeper understanding of saving and the value of living within their means. By developing this essential life skill, students will be well prepared to fund their higher education and make other important investments in the future.”
The Unit will mainly offer student access to the wide range of savings products and investment plans available for minors. Moreover, the bank aims to create a digital payment ecosystem for the school also offering members of the staff and the Old Boys Association with exceptional services and benefits.
St. Joseph’s College Rector Rev. Fr. Ranjith Andradi, expressing his pride in the partnership, stated: “We are proud to be associated with HNB in reopening the Student Savings Unit. This initiative not only imparts valuable lessons in investing and saving but also instils a strong sense of financial management in our students. We believe this partnership will contribute to their progress and success.”
The Student Savings Unit, introduced by HNB in 1994, has played a pivotal role in promoting financial literacy among students. With 162 units established across Sri Lanka, HNB actively engages students in managing mini-banks within their schools, fostering leadership and financial responsibility. Each year, HNB provides comprehensive training to over 1,000 students, empowering them to become financially savvy individuals.
HNB is rated A (lka) by Fitch Ratings and was awarded the esteemed title of ‘Sri Lanka’s Best Corporate Citizen’ for 2022 by the Ceylon Chamber of Commerce. Other major accolades include being ranked among the Top 1,000 Banks in the World for six consecutive years by the acclaimed UK based “The Banker Magazine”, being adjudged the ‘Best Retail Bank in Sri Lanka’ for the 13th occasion by the Asian Banker, as well as securing a Top 5 position on Business Today’s Top 40 rankings for 2022.
Navy divers retrieve 148 from watery graves within a year
Establishment of the Truth and Reconciliation Commission
Draft report on the inquiry into the destruction of North-Eastern archaeological sites and interference with conservation activities handed over to the Prime Minister
‘Dates have the highest sugar content to fight Coronavirus’
Sunday Island 27 December – Headlines
#Sundayisland Sunday Island- 31 January- Headlines
Features7 days ago
Jerome Fernando and his profane gimmicks
Opinion7 days ago
Pastor Jerome Saga: Buddhist perspective
News6 days ago
Gold smuggling govt. MP walks free after paying Rs 7.4 mn fine
Opinion6 days ago
Jerome Fernando and his profane gimmicks – II
Business7 days ago
Elephant House SuperHeroes powered by Dialog returns for a second phase to discover Sri Lanka’s future leaders
Sports6 days ago
When sport clean-bowls politics
Features5 days ago
Murders, exhumations, sacking: hence never a dull day in Paradise
Business7 days ago
Report to be soon out on those who slip through the tax net