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Sunday February 25th, 2024

John Keells Hotels losses widen after Sri Lanka Easter bombings

ECONOMYNEXT – Net losses at John Keells Hotels Plc (KHL) grew 66 percent to 437 million rupees in the June quarter from a year earlier, as revenues from hotes in Sri Lanka fell 27 percent, on top of a closure of a property in the Maldives, interim accounts showed.

KHL which operates the Cinnamon branded hotels outside Sri Lanka’s capital Colombo, and the Maldives, said it lost 30 cents per share in the quarter. The firm’s share last traded at 7.70 rupees a share.

Sales in Sri Lanka fell 27.6 percent to 746.3 million rupees, as tourist arrivals to Sri Lanka plunged 71 percent in May after East Sunday bomb attacks, followed by a 57 percent fall in June.

Cinnamon Grand, which is part of the same chain but is operated through Asia Hotels and Properties Plc responsible for the group’s Colombo city hotels, was victim to the bombings.

Cinnamon hotels had offered discounts in the aftermath of the attacks, especially targeting locals.

Meanwhile, revenue at KHL’s Maldives operation fell 15.7 percent to 948 million rupees, as one of its island resorts, Cinnamon Dhonveli Maldives, was partially closed for refurbishment.

Group level revenue for the June quarter fell 22 percent to 1.7 billion rupees from a year earlier while cost of sales rose 19 percent to 658 million rupees, leading to gross profits falling 23 percent to 1 billion rupees.

Finance costs grew 75 percent to 104.6 million rupees.

Long-term borrowings as at June 30 grew to 10.9 billion rupees from 9.5 billion rupees three months earlier, while short-term borrowings grew to 1.6 billion rupees from 979.4 million rupees.

Total assets grew to 44.7 billion rupees from 37.3 billion rupees, as the firm changed accounting standards.

The move to SLFRS 16 from the older LKAS 17 standard changes lease rentals paid in advance to right of use assets.

KHL said that the main leases are for properties, typically ranging from 10 to 35 years, with options for extension. (Colombo/Jul25/2019)

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Sri Lanka could get US$500mn from ADB in 2024

ECONOMYNEXT – Sri Lanka could receive 500 million US dollars in support from the Asian Development Bank in 2024 based on the progress of policy reforms, Country Director of the Manila-based lender, Takafumi Kadono said.

The ADB expect to go to its Board around March or April with a 100 million US dollar power sector loan subject to the cabinet of ministers of approving a revised electricity reform bill.

A 100 million dollar loan to support SMEs could also be approved in the early part of the year. Sri Lanka is setting up a credit guarantee agency to support credit for small firms.

A 200 million dollar credit for financial sector was also slated for the year. The ADB gave the first tranche of the financial sector policy loan late last year.

A $100mn for the water sector could also be approved later in the year.

Sri Lanka could get around 200 to 300 million US dollars a year at the lowest rate, or concessional ordinary capital resources (COL) rate of 2 percent.

The balance of would come at the ordinary capital resource rate linked to SOFR.

The ADB has also started work on a ‘Country Partnership Strategy’ for Sri Lanka covering the 2024-2028 period, Kadodo said. (Colombo/Feb25/2024)

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Sri Lanka’s multi-aligned foreign policy based on friendship: Min

ECONOMYNEXT – Sri Lanka’s multi-aligned foreign policy is based on friendship to all and enmity to none, its Minister of Foreign Affairs has said.

“Non-alignment means not becoming a bystander. Non-alignment means you are not forced or coerced into a camp to take sovereign decisions… you make your own choices. Whether it is commercial, security, regional or otherwise,” M U M Ali Sabry said on X (twitter).

“I have repeatedly stressed that sovereignty is the right to have your own opinion on what’s right and wrong, and to stand by your principles. Our multi-aligned foreign policy is based on friendship to all and enmity to none,” Sabry was quoting from his speech at the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKI) Foreign Policy Forum, on the theme ‘Reassessing Non-Alignment in a Polarised World’.

Sri Lanka is one of the founding members of the Non-Aligned Movement.

The strategically located island has been increasingly walking a fine line between opposing global factions as it seeks to come out of a financial crisis. (Colombo/Feb24/2024)

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Sri Lanka’s Commercial Bank Dec net down on tax provisions

ECONOMYNEXT – Sri Lanka’s Commercial Bank of Ceylon reported profits of 6.9 billion rupees from the December 2023 quarter down 21 percent, despite an improvement in net interest income and lower provisions, amid a change in tax provisions.

Pre-tax profits were 8.89 billion rupees up from 2.4 billion rupees. There was a 6.4 billion tax reversal last year compared to a 1.7 billion rupee tax charge this year.

Commercial Bank reported earnings of 5.26 rupees for the quarter. For the year to December 2023 earnings were 16.07 rupees per share on total profits of 21.1 billion rupees, down 11.3 percent.

Net fee and commission income was down 1.2 percent to 6.1 billion rupees.

Net interest income went up 16.8 percent to 25.5 billion rupees, with interest income rising marginally by 1.3 percent to 73.0 billion rupees and interest expense falling 5.45 percent to 47.5 billion rupees.

Loans and advances to customers grew 4.06 percent to 1.17 billion rupees in the year to December. Debt and other financial instruments fell 10.5 percent to 649 billion rupees.

Financial assets measured and fair value through other comprehensive income was at 287 billion rupees, up from 117 billion rupees.

Impairment charges were 13.1 billion rupees, down from 19.6 billion rupees last year.

Gross assets were up 6.45 percent to 2.36 billion rupees. Net assets were up 5.51 percent to 214 billion rupees. (Colombo/Feb24/2024)

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