Sri Lanka’s John Keells Holdings reports Rs. 14.28 billion EBITDA in Q3
The Morning: John Keells Holdings (JKH) recorded an EBITDA (earnings before interest, taxes, depreciation and amortisation) of Rs. 14.28 billion for the third quarter of FY24/25, reflecting a 4% increase compared to Rs. 13.74 billion in the same period last year.
Excluding fair value gains on investment property and the previous year’s deferred tax credit at South Asia Gateway Terminals (SAGT), EBITDA for Q3 2024/25 increased by 10% to Rs. 14.89 billion, up from Rs. 13.58 billion in Q3 2023/24.
The group’s EBITDA includes substantial costs associated with the pre-opening and operations of ‘Cinnamon Life’ hotel.
The 687-key Cinnamon Life hotel commenced operations on 15 October 2024, with all restaurants, banquet facilities, outdoor venues, and the wellness centre now fully operational. Demand for the hotel’s event spaces has exceeded expectations, reflecting positive market interest.
The integrated resort’s residential and office towers have also seen resurgence in interest in recent months. The fit-out of the gaming space is progressing well and is expected to be operational along with the retail mall in Q3 of the 2025 calendar year.
Construction on the West Container Terminal at the Port of Colombo is advancing, with all civil works for the first phase completed. The terminal’s operating equipment has been received and is undergoing commissioning.
The project is on track for completion by February, with its inaugural test vessel expected shortly thereafter, marking the commencement of its first phase of operations.
The Ports and Logistics segment posted improved profitability, driven by higher volumes and a better mix at SAGT. However, Lanka Marine Services faced a contraction in margins due to intensified local competition, temporary inventory oversupply, and the appreciation of the Rupee, despite a growth in volume.
The Consumer Foods segment recorded strong growth in profitability, supported by double-digit volume growth and improved margins in the Beverages and Frozen Confectionery businesses. The Supermarket segment also delivered a strong performance, with same-store sales increasing by 14%, leading to higher profitability and margins.
In the Leisure segment, performance was impacted by pre-opening and operating costs related to Cinnamon Life, alongside lower profitability in the Colombo Hotels and Maldivian Resorts segments, largely due to the translation impact of a stronger rupee compared to the previous financial year.
Nations Trust Bank posted strong profit growth, driven by a net gain from the disposal of international sovereign bonds, steady margins, asset growth, impairment reversals, and gains on government securities. Union Assurance maintained steady profitability, with double-digit growth in both first-year premiums and renewal premiums.
OSL take:
Sri Lanka’s private sector has shown impressive growth and profits in the past few years after facing an unprecedented economic crisis just a few years back in 2022. It is an indication of the strength and resilience of Sri Lanka’s overall economy. The growth posted by a leading Sri Lankan conglomerate, JKH, shows the growth and business potential in the country. The current economic activities in the country have opened up many business/investment opportunities in all key economic sectors as Sri Lanka is working towards becoming a hub in the South Asian region. A robust private sector is a prerequisite of a business/investment destination. All these developments have served to boost the confidence of foreign businesses/investors in Sri Lanka, resulting in many of them exploring the expanding business/investment opportunities in Sri Lanka. While Sri Lanka’s expanding economy presents a host of business/investment opportunities with guaranteed returns on investments (ROIs), there are also opportunities for foreign businesses/investors to form partnerships or joint ventures with local businesses with the aim of further expansion locally and internationally.
| Article Code : | VBS/AT/20250206/Z_2 |