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Saturday, 27 July 2013 00:23 - - {{hitsCtrl.values.hits}}
Premier blue chip John Keells Holdings (JKH) yesterday announced a dip in profits for the FY14 first quarter, a development which Chairman Susantha Ratnayake pinned to reflection of current economic challenges in the country.
JKH’s profit attributed to the equity holders for the first quarter of the financial year 2013/14 at Rs. 1.59 billion reflected a 4% decrease over the corresponding period in the previous financial year. The group profit before tax (PBT) for the first quarter of the financial year 2013/14 at Rs. 2.20 billion was a decrease of 8% over the PBT of Rs. 2.40 billion recorded in the corresponding period in the previous financial year.
The revenue for the first quarter of the financial year 2013/14 of Rs. 20.01 billion however remained in line with the revenue recorded during the same period last year.
“The results of the first quarter of the financial year are a reflection of current macroeconomic challenges emanating from the decisive actions taken by the Government, including the implementation of cost-based electricity pricing, over the past year to stabilise an over-heated economy and reduce the budget deficit,” JKH Chairman Susantha Ratnayake said in his review accompanying interim results.
“Whilst these macroeconomic factors may have a negative impact on the performance of the group in the short term, we believe that your group is well positioned to capitalise on the emerging growth opportunities because of its strong fundamentals and we, therefore, remain optimistic of the future,” Ratnayake added.
He also said that single digit inflation, lower interest rates and the planned mega infrastructure developments are expected to translate into increased demand which will contribute positively to economic growth.
Taking this view of the future, JKH, Ratnayake said has announced an integrated resort development, subject to the project company, Waterfront Properties (Pvt) Ltd., receiving all the requisite approvals and your company receiving shareholder approval, where necessary. The project company has entered into an agreement with the Board of Investment of Sri Lanka (BOI) as a precursor to facilitating the requisite approvals. Subsequent to the signing of the BOI agreement, the first gazette as per the Strategic Development Projects Act was published by the Government on 18 July.
The waterfront project is an integrated resort located at Glennie Street/Justice Akbar Mawatha and consists of multiple businesses including a luxury hotel, convention center, entertainment and gaming facilities, international standard shopping mall, luxury condominiums, serviced apartments and office space. The concept of integrated resorts has gained popularity, particularly in the South East Asian region. Sri Lanka’s proximity to these destinations and to key source markets strengthens its offering as an exciting, and emerging, leisure destination in South Asia.
The transportation industry group PBT of Rs. 748 million in the first quarter of 2013/14 was a decrease of 22% and the leisure industry group PBT of Rs. 461 million in the first quarter of 2013/14 was a decrease of 29% over. The consumer foods and retail industry group PBT of Rs. 249 million in the first quarter of 2013/14 was a decrease of 36%. The financial services industry group PBT of Rs. 259 million in the first quarter of 2013/14 was marginally higher.
However the property industry group PBT of Rs. 142 million in the first quarter of 2013/14 was an increase of 120%. The information technology industry group PBT of Rs. 65 million in the first quarter of 2013/14 was an increase over the corresponding period in the previous financial year (2012/13 Q1: Rs. 6 million). Other, comprising of plantation services and the corporate centre, recorded a PBT of Rs. 275 million in the first quarter of 2013/14 (2012/13 Q1: Rs. 72 million).
