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John Keells Holdings loses Rs1.6bn to Sri Lanka Covid-19 lockdown, sees recovery

LEISURE: JKH has hotels in Sri Lanka and the Maldives

ECONOMYNEXT – Sri Lanka’s John Keells Holdings, which has interests in leisure, ports, consumer goods and retail said it lost 1.6 billion rupees in the June 2020 quarter due to Coronavirus lockdowns but is seeing better than expected recovery as controls were eased.

The group reported loss per share of 1.26 rupees for the quarter.

Group revenues in the June quarter fell 32 percent to 21.6 billion rupees and cost of sales fell at a slower 26 percent to 19.6 billion rupees driving gross profits down 63 percent to 1.9 billion rupees.

Finance costs rose to 1.9 billion rupees from 1.1 billion rupees a year earlier and finance income fell 17 percent to 1.72 billion rupees.

With Sri Lanka containing the spread of Coronavirus, many of the businesses are recovering faster than expected.

“…[B]usiness recovery is reverting to almost pre COVID-19 levels, faster than anticipated, and this momentum is expected to continue if the pandemic remains contained,” Chairman Krishan Balendra told shareholders.

“The Leisure business, however, continues to be significantly impacted given the closure of the airport in Sri Lanka and the high dependency on the recovery of key source markets in particular.”

Maldives has re-opened the airport in July.

“While bookings for the next few weeks are low, we are encouraged by strong forward bookings for the peak season of January to April 2021, exceeding the bookings we had for the same time last year,” he said.

“Whilst Sri Lanka is yet to re-open its airport, our hotels in Sri Lanka have now commenced operations where the recovery of domestic tourism has been encouraging.”

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South Asia Gateway Terminals, the container terminal had seen a 40 percent fall in volumes in April, which was reduced to a 20 percent fall in June. Bukering volumes were down but margins were better.

In consumer foods, easing of restrictions saw positive volume growth in June for ice creams but beverages showed a single digit fall, he said.

Supermarkets have seen a ‘sharp rebound’ in sales with customer footfalls recovering towards pre-Covid levels.

“Same store sales growth for the month of June recovered to negative single digit levels compared to the decline of 45 per cent, on average, in the months of April and May,” Balendra said.

“Given the change in the shopping patterns of customers where the frequency and purchase patterns due to consolidation of baskets has changed, the statistics on footfall and basket values are distorted in the short term.”

Supermarkets have revamped the online sales portal. Two outlets were opened in July.