Sri Lanka John Keells Holdings profits up 19-pct in June quarter

July 27, 2017 (LBO) – Sri Lanka’s diversified conglomerate John Keells Holdings group profits rose 19 percent to 2.8 billion rupees in the June quarter from a year earlier, the interim accounts showed. The firm reported basic earnings of 2.04 rupees per share for the quarter against 1.74 rupees reported a year earlier. Group sales rose 22 percent to 18.6 billion rupees in the quarter with revenues up by 18 percent to 26.8 billion rupees. Group finance income rose 65 percent to 3.5 billion rupees in the quarter while change in insurance contract liabilities went up by 57 percent to 2.2 billion rupees. In segmented results, group’s transportation business witnessed 11 percent profit growth in the quarter over the same period last year. “Whilst the bunkering business improved market share and recorded a notable growth in volumes, a contraction in margins arising out of the competitive operating environment impacted profitability during the quarter,” Chairman Susantha Ratnayake said. Consumer foods and retail sector showed a negative growth of 18 percent while leisure sector reported a negative growth of 78 percent. Ratnayake said the decline in consumer foods sector is mainly on account of the lower volumes in the frozen confectionery and beverage businesses, where a tapering of demand continued to be witnessed in the quarter. “The decline of leisure sector arises from a non-cash impact of Rs203 million on account of the acceleration of depreciation on assets.” “It includes the closure of 'Bentota Beach by Cinnamon,' and the partial closures of 'Cinnamon Dhonveli Maldives' and 'Ellaidhoo Maldives by Cinnamon' for on-going refurbishments.” The Chairman said the construction of Cinnamon Life is progressing with encouraging momentum. He said the feasibility evaluation of the prospective property development project in central Colombo is ongoing, where the finalisation of design concepts and obtaining the requisite approvals are underway. Other segment, including the plantation services sector and the holding company, profit before tax of 1.66 billion rupees in the first quarter is a significant increase over the last year. “The increase in PBT is mainly attributable to the increases in finance income due to higher interest rates and a higher value under investment, and exchange gains recorded at the Company on its foreign currency denominated cash holdings.”