Sri Lanka JKH December net down 10-pct to Rs3.9bn
ECONOMYNEXT – Sri Lanka’s John Keells Holdings said group net profit fell 10 percent to 3.9 billion rupees in the December 2015 quarter from a year ago when a hefty capital gain was included in earnings.
Group sales were flat at 24.7 billion rupees with its insurance unit, Union Assurance General Limited being classified as an associate company from January 2015 onwards, and bunkering business hit by the steep fall in oil prices, a stock exchange filing said.
December quarter diluted earnings per share fell to 3.26 rupees. Diluted EPS for the nine months to December 2015 rose to 8.23 rupees, with net profit up five percent to 9.55 billion rupees from the year before.
JKH group had made capital gains of 610 million rupees in the December 2014 quarter.
“Excluding the impact of the capital gain, the adjusted profit attributable to shareholders for the quarter and the first nine months are an increase of 5 percent and 17 percent, above the corresponding periods in the previous financial year,” JKH chairman Susantha Ratnayake said.
JKH’s transportation industry group profit before tax fell 32 percent to 464 million rupees in the December quarter from the previous financial year mainly because of a lower contribution from the bunkering business and to a lesser extent the ports business.
“The Port of Colombo witnessed a year on year growth in excess of 5 per cent overall, which underscores the potential and augurs well for capacity led growth,” Ratnayake said.
The bunkering business maintained its market share during the quarter but sales and profitability were “significantly impacted” by the steep reduction in global oil prices where inventory purchased at higher prices had to be sold at prevailing market prices, he said.
JKH group’s hotels business pre-tax profit fell 13 percent to 1.22 billion rupees in the December quarter from the year before because of lower occupancy in its city hotels with the exception of Cinnamon Red.
This was because of higher competition with the more hotels being built in Colombo and the lower volumes of business and conference guests.
“The Sri Lankan resorts sector witnessed an increase in average room rates although occupancies declined marginally due to increased room inventory coupled with a decrease in arrivals from the Russian market,” Ratnayake said.
Tourist arrivals in to the Maldives were also hit by the political uncertainties and travel advisories to the country.
JKH’s property business pre-tax profits rose 48 percent to 558 million rupees in the December from the previous year mainly owing to sales of apartments in its “7th Sense” residential development project.
The construction of Cinnamon Life has seen “”some unforeseen delays” and is expected to be completed in 2019.
The group’s consumer foods and retail business pre-tax profit shot up 86 percent to 1.08 billion rupees in the December 2015 quarter from the previous year.
“The improved performance is mainly attributable to the double digit volume growth on account of positive consumer sentiment,” Ratnayake said.