Sri Lanka’s John Keells Hotels weighed down by closure, Maldives resorts in Dec
ECONOMYNEXT – John Keells Hotels, which has properties in Sri Lanka and the Maldives, said profits fell 48 percent from a year ago to 203.5 million rupees in the peak December 2017 quarter amid sliding margins and a closure of hotels for refurbishment.
The company, a unit of John Keells Holdings, reported earnings of 14 cents a share in the quarter. In the nine months to end December 2017 earnings amounted to 05 cents a share on total profits of 73.3 million rupees, down 91 percent from a year ago.
Revenue fell five percent from a year ago to 2.9 billion rupees during the quarter, cost of sales increased 3 percent to one billion rupees contracted gross profits by 9 percent to 1.8 billion rupees, interim accounts filed with the stock exchange showed.
Administrative expenses rose 6 percent to 1.1 billion rupees.
It included 250 million rupees for depreciation and a voluntary retirement scheme coming from the closure of the 159-key Bentota Beach Hotels for redevelopment in June 2017 for an estimated capital cost of 4.8 billion rupees.
Revenue from its Sri Lankan resorts fell 13 percent to 1.2 billion rupees while while Maldives revenues grew 2.5 percent to 1.7 billion rupees during the December quarter.
Declining margins in both locations saw profits decline 70 percent to 49.3 million rupees in Sri Lanka and fall 31.4 percent to 156 million rupees in the Maldives.
Despite improving room rates and occupancies the Sri Lanka resorts segment saw profits decline due to the closure of Bentota Beach, the parent John Keells Holdings told shareholders in a stock exchange filing.
"The Maldivian Resorts segment recorded an improvement in average room rates, although profitability was impacted by lower occupancies and the partial closure of the two properties," it said.
Two resorts in the Maldives (Cinnamon Dhonveli and Ellaidhoo Maldives by Cinnamon) were partially closed for redevelopment and refurbishment for much of the year. Both properties became fully operational by the end of October 2017.
During the quarter, John Keells Hotels invested 817 million rupees to increase its stake in Ceylon Holiday resort from 98.65 percent to 99.09 percent.
The company owns and manages eight resorts in Sri Lanka with a combined capacity of 997 rooms and three resorts in the Maldives with 340 rooms combined. (COLOMBO, February 07, 2018)