Sri Lanka’s John Keells Holding profits down on hotels, interest in December

ECONOMYNEXT – Profits at Sri Lanka’s John Keells Holdings Plc fell 50 percent to 2.39 billion rupees in the December 2019 quarter from a year earlier, with a recovery in retail, consumer foods and bunkering, overshadowed by losses in hotels and lower interest income, interim accounts showed.

John Keells Holdings (JKH) reported earnings of 1.82 rupees per share for the quarter, while the firm’s share closed 50 cents up at 161 at the Colombo Stock Exchange on Wednesday.

The stock closed at 160.00 rupees, up 50 cents.

JKH, which is the country’s largest listed firm reported 3.46 rupees in earnings per share for the nine months on total profits of 5.6 billion rupees, which were down 53 percent.

Revenues including insurance grew 2 percent to 37.4 billion rupees in the quarter from a year earlier, cost of sales grew 3 percent to 7.6 billion rupees and gross profits were flat at 7.6 billion rupees.

Finance income halved to 1.9 billion rupees from 3.8 billion, and interest expenses grew 113 percent to 718 million rupees, as cash holdings were used to build real assets.

JKH is currently building its flagship mixed-development project Cinnamon Life with investments just over 800 million US dollars.

Profits at JKH’s retail segment grew to 481 million rupees in the quarter from 154 million rupees with more supermarkets being opened and more customers visiting.

“The business continued to record strong growth in profitability driven by a notable contribution from new outlets and a robust 6.1 per cent growth in customer footfall which contributed towards a 5.4 per cent increase in same store sales,” Chairman Krishan Balendra told shareholders.

“Seven new outlets were opened during the quarter, increasing the total store count to 107 as at 31 December 2019.”

Consumer foods sales grew with both volumes and a better sales mix helping beverages and frozen confectionery, he said.

Transportation which includes a container terminal and bunkering earned 1.1 billion rupees, marginally up but hotels lost 357 million rupees, reversing form 587 million rupee profit last year.

Sri Lanka was hit by Easter Sunday attack in April 2019. Though the tourism industry recovered by December, with occupancy picking up, prices were weaker.

JKH’s leisure sector posted 2 billion rupees in losses for the quarter, down from 708.1 million rupees in profits, with the Maldivian hotels also in the red. (Colombo/Jan29/2020)

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