John Keells reports 2% revenue growth in 3Q | Sunday Observer

John Keells reports 2% revenue growth in 3Q

Krishan Balendra
Krishan Balendra

The Transportation, Consumer Foods, Retail and Financial Services groups recorded growth in profits.

The Group’s year-on-year performance for the quarter was impacted by the downturn in the Group’s Sri Lankan leisure business which continued to be impacted after the Easter Sunday terror attacks, exchange losses recorded at the Holding Company on its foreign currency denominated cash holdings compared to the significant exchange gains recorded in the previous year and lower income as a result of the deployment of cash in new investments.

Consumer Foods witnessed growth.

JKH declared a second interim dividend of Rs.1.50 per share, to be paid on February 19.

John Keells Holdings PLC reported a 2 per cent growth in Group revenue during the third quarter of the year of Rs.37.46 billion. Transportation, Consumer Foods, Retail and Financial Services industry groups recorded a growth in profits although overall Group performance was impacted by the Sri Lankan Leisure business and exchange losses at the Holding Company.

The underlying performance of the Group is depicted after adjusting for the new Accounting standard SLFRS 16 which came to effect this year, for easier comparison. Accordingly, EBITDA in 2018/19 is comparatively adjusted for the impact of SLFRS 16, on a like-with-like basis against the EBITDA in 2019/20 (adjusted EBITDA).

The Group’s Bunkering business, Lanka Marine Services (LMS), recorded a strong growth in profits. The Transportation industry group EBITDA of Rs.1.29 billion in Q3 of 2019/20 was a 8 per cent increase over the adjusted EBITDA of Rs.1.19 billion for the third quarter of 2018/19.

The Consumer Foods industry group EBITDA of Rs.722 million for Q3 of FY2019/20 was a 21 per cent increase over the adjusted EBITDA of Rs.598 million for the third quarter of 2018/19. Both the Beverage and the Frozen Confectionery businesses recorded an improvement in performance driven by volume growth and a better sales mix.

The retail industry group recorded a revenue growth of 18 per cent which was driven by a strong performance in the Supermarkets business, driven by a notable contribution from new outlets and strong growth in customer footfall. Retail recorded an EBITDA of Rs.1.59 billion compared with the adjusted EBITDA of Rs.766 million in the same period last year. Seven new outlets were opened during the quarter, increasing the total store count to 107 as at December 31, 2019.

EBITDA for the third quarter of 2019/20 was Rs.656 million, compared to the Rs.1.34 billion (adjusted) recorded in Q3 2018/19.

The newly reconstructed 159-room Cinnamon Bentota Beach commenced operations in January 2020.

The Financial Services industry group EBITDA of Rs.1.16 billion for Q3 of FY2019/20 was a 11 per cent increase over the adjusted EBITDA of Rs.1.05 billion for the third quarter of 2018/19. Nations Trust Bank PLC recorded a strong improvement in profitability. The performance of Union Assurance PLC improved driven by a growth in gross written premiums.

Other, Including Information Technology and Plantation Services sectors recorded an EBITDA of Rs.151 million in the third quarter of 2019/20 over the adjusted EBITDA of Rs. 2.44 billion for the third quarter of 2018/19. The decrease in profitability is mainly attributable to the exchange losses recorded in the third quarter of 2019/20. Profitability was also impacted by the on-going deployment of equity into the Cinnamon Life project which resulted in a year-on-year decrease in income.

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