Tourism slump, power unit loss trims Sri Lanka’s Aitken Spence June profit

ECONOMYNEXT – Sri Lanka’s Aitken Spence conglomerate said June 2015 quarter net profit fell 44 percent to 420 million rupees from a year ago mainly owing to a downturn in its hotels and a loss in its energy business.

Sales of the group fell 39 percent to 5.9 billion rupees during the period, a stock exchange filing said.

Earnings per share fell to 1.04 rupees in the June 2015 quarter from 1.84 rupees a year ago.

A company statement said its 100 MW Ace Power Embilipitiya unit ceased operations in April 2015 after the end of its 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,” it said.

J M S Brito, Deputy Chairman and Managing Director of Aitken Spence, said the group has several large resort construction projects place in Negombo, Kalutara and Ahungalla that are expected to add around 750 rooms to Sri Lanka’s tourism sector.

“The construction of the Heritance Negombo and the expansion of The Sands in Kalutara are expected to be completed within the financial year, despite delays,” he said.

“The construction of the 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 licenses to commence commercial operations,” he added.

The group’s tourism business profit fell while that from its maritime and logistics sector improved along with slightly higher services sector profits, the accounts showed.

“The hotel industry in the Maldives felt the negative effects of key source markets with arrivals from Russia falling by 40 percent and the Korean market showing a significant drop, during the first financial quarter,” the statement said.

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“Aitken Spence, which has several resorts in the islands, has been adjusting to changing market conditions in the Maldives with several key source markets to Maldives facing downturns.”  (Colombo/August 10 2015)
 

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