Top blue-chip company John Keells Holdings Plc (JKH) reported an EBITDA of Rs. 7.7 billion for the first quarter of FY25, marking a 13% decrease from the previous year. The bottom line, however, showed a net loss of Rs. 868 million.
The Group’s EBITDA included significant pre-opening costs related to the ramp-up for the opening of the ‘Cinnamon Life’ hotel at ‘City of Dreams Sri Lanka’. The first quarter of the previous year had also benefited from a deferred tax credit at the Group’s Ports and Shipping business, South Asia Gateway Terminals (SAGT). Excluding these impacts, Group EBITDA for Q1 FY25 increased by 2% to Rs. 8.47 billion compared to the same period last year.
Gross profit rose by 15% to Rs. 12.7 billion, while operating profit declined by 20% to Rs. 1.3 billion. Pre-tax results showed a Rs. 204 million loss compared to a Rs. 1.4 billion profit a year ago, and the post-tax loss was Rs. 967 million for Q1 FY25, down from a Rs. 1.2 billion profit. Net profit attributable to equity holders of the parent was a negative Rs. 868 million, compared to Rs. 1.24 billion in Q1 FY24.
Sectors such as consumer foods, retail, and financial services performed well, whereas transportation, leisure, and property sectors lagged.
JKH reported that the finishing works at the ‘City of Dreams Sri Lanka’ integrated resort are progressing well. The 687-key ‘Cinnamon Life’ hotel, along with its restaurants and banquet facilities, are in the final stages of fit-out and are set to commence operations in October 2024. The remainder of the project, including the 113-key ‘Nuwa’ hotel, gaming operations, and retail mall, will be operational in phases, with overall completion expected by mid-2025.
Following the execution of a 20-year lease agreement for the demarcated gaming space at ‘City of Dreams Sri Lanka’ between Waterfront Properties Ltd. and a subsidiary of Melco Resorts and Entertainment Ltd., Melco has begun the fit-out work of the gaming space.
Work on the West Container Terminal (WCT-1) at the Port of Colombo is also progressing well. The first batch of quay and yard cranes will arrive in August 2024, with commissioning and automation expected to be completed by the third quarter of 2024/25. The first phase of the terminal is scheduled to be operational in Q4 2024/25.
Profitability at SAGT increased, driven by double-digit growth in throughput from both domestic and transhipment volumes. Lanka Marine Services (LMS), the Group’s bunkering business, saw double-digit volume growth, though profitability was impacted by a contraction in margins due to volatile global fuel oil prices and intensified competition from local and regional players.
Both the Beverages and Frozen Confectionery businesses recorded an increase in EBITDA, driven by significant growth in margins and volumes. The Supermarket business also performed strongly, with same-store sales growth of 12%, driven by a 12% increase in customer footfall, resulting in improved profitability and margins.
The performance of the Leisure industry group was impacted by pre-opening costs for the ‘Cinnamon Life’ hotel and a decline in profitability at the Group’s Maldivian resorts due to lower occupancy. However, occupancies in Maldivian Resorts are expected to increase for the upcoming peak season based on current forward bookings and a normalized mix in arrivals.
Nations Trust Bank PLC reported strong growth in profitability, aided by loan growth, lower impairments, and increased trading and fee income. Union Assurance PLC saw encouraging double-digit growth in gross written premiums, driven by renewal premiums and regular new business premiums.