Sri Lanka’s John Keells Holdings net down 59-pct in Dec
ECONOMYNEXT – Profits at Sri Lanka’s John Keells Holdings fell 59 percent to 992 million rupees in the December 2020 quarter from a year earlier, with sales hurt by a Coronavirus surge interim accounts showed.
The group reported earnings of 75 cents per share for the quarter. For the nine months to December John Keells Holding reported earnings of one cent, on total profits of 14.6 million rupees.
Group revenues fell 5 percent to 35.5 billion rupees, while insurance revenues went up 19 percent to 4.0 billion rupees. Cost of sales was up 1 percent to 30.1 billion rupees shrinking gross profits 29 percent to 5.4 billion rupees.
Finance costs were up 17 percent to 843 million rupees but finance income grew 31 percent to 2.5 billion rupees helped by currency depreciation, with the firm having most of its cash reserves of 17.9 billion rupees in dollars.
The spread of Coronavirus in the third quarter had hit consumer sentiment in October and November, though there was an increase.
“Activity demonstrated near normal levels in many businesses of the Group in the month of December, with the exception of Leisure where domestic travel was yet to show signs of recovery given a certain degree of caution relating to travel and entertainment by customers,” Chairman Krishan Balendra told shareholders.
Bunkering revenues were recovering though still below pre-Covid levels.
Volumes at South Asia Gateway Terminals were hit with Colombo Port container volumes in the quarter down 14 percent from last year, which was compounded by union action as well as import controls.
Consumer goods revenues were down 16 percent with isolation in high risk areas. Beverages and ice cream was down but were rising. There were some price increases and new products.
Office automation growth was in double digits with mobile phone sales reaching a billion rupees in November and December.
Earnings before interest tax depreciation and amortization in supermarkets were up 4 percent to 1.3 billion rupees partly helped by online sales and new outlets. Basket sizes and footfalls had changed due to the pandemic, Balendra said.
In hotels EBITDA was a negative 1 billion rupees, Sri Lanka hotels in particular hit by the surge in Coronavirus.
Maldives was positive with December occupancy reaching 53 percent at ‘attractive rates’ he said. In January bookings from the UK were cancelled though other markets were growing.
Bey Beruwala was open for foreign tourists after the airport was opened.
“We will continuously review the trend of tourist arrivals, and, based on the momentum, expand our portfolio of hotels offered under this scheme,” he said.
“Whilst the opening of the airports is expected to augur well for reviving the tourism industry, the performance of the Leisure business will largely depend on the revival of regional and global travel, when travellers regain confidence
.”Regardless, it remains encouraging to witness the momentum of forward bookings, demonstrating a significant ‘pent up’ demand for leisure travel.
“The prospects for tourism in Sri Lanka continue to be promising, as we expect the destination to perform similar to
other countries which have seen a gradual revival post the opening of borders, such as with the Maldives.”
The property sector was hurt by mall operations. Apartment sales at Tri-zen was gaining traction with low interest mortgages being offered by banks.
Certificates of conformity had been given for office and residences at Cinnamon Life and they will be handed over progressively from the next quarter.
Workers at the site were below pre-Covid levels but it was improving, Balendra said.
Financial services had EBITDA of 6 percent with Union Assurance growing and stock broking recovering.
Nations Trust Bank was restricted by moratoriums and higher provisions.(Colombo/Jan29/2021)