Sri Lanka’s JKH net up 37-pct in Sept
ECONOMYNEXT – Sri Lanka’s John Keells Holdings Plc (JKH) net profits for the September quarter grew 37 percent from a year earlier to 5.1 billion rupees driven by stronger finance income and a tax reversal.
The firm reported earnings of 3.67 rupees per share for the quarter. For the 6-months to September, earnings were 5.25 rupees per share on total profits of 7.2 billion rupees , which were up 11 percent.
Revenue for the September quarter grew 10 percent from a year earlier to 32.6 billion rupees, cost of sales grew at a faster 17 percent to 26.4 billion rupees, and gross profits fell 13 percent to 6.2 billion rupees.
Selling and distribution expenses grew 66 percent to 1.7 billion rupees.
Finance income went up 39 percent to 3.5 billion rupees.
JKH received a tax reversal of 632.5 million rupees, compared to a tax expense of 941.4 million rupees last year.
Financial services contributed 1.9 billion rupees in profits to JKH in the September quarter, up 309.3 percent from a year earlier, despite revenue remaining flat at 2.5 billion rupees.
The boost came from the insurance arm Union Assurance, which received a 1.4 billion rupee tax benefit with the changes to the income tax law this April.
Transport segment profits were up 1.3 percent to 1.1 billion rupees, with revenue up 47.8 percent to 6.1 billion rupees.
While the bunkering business had greater volumes and improved margins, the container terminal in Colombo was affected with lower domestic container traffic, Chairman Susantha Ratnayake said.
Leisure sector profits fell 44.8 percent to 397.2 million rupees, on sales which fell 5.1 percent to 5.5 billion rupees.
"The decline in profitability is mainly attributable to the City Hotels sector, the partial closure of “Ellaidhoo Maldives” and the closure of “Cinnamon Hakuraa Huraa Maldives” for the reconstruction of the hotel." Ratnayake said.
Consumer foods profits fell 47.5 percent to 275.8 million rupees, with sales up 1.9 percent to 4.3 million rupees.
A sugar tax which depressed sales of soft drinks, and costs of setting up a new ice cream factory saw segment profits fall, Ratnayake said.
The retail segment, which operates Keells supermarkets fell to a 112.4 million rupee loss from a 354 million profit.
"The supermarkets business continued to record a growth in customer footfall which contributed towards modest same store sales, despite the subdued macro conditions which also resulted in a contraction in average basket values," Ratnayake said.
The supermarkets also went through a rebranding and refitting phase, adding to costs, he said.
Long-term borrowings grew to 19.7 billion rupees from 18.5 billion rupees, while short-term borrowings were up to 3.5 billion rupees from 3.1 billion rupees. (Colombo/Nov11/2018)