Saturday Dec 14, 2024
Saturday Dec 14, 2024
Tuesday, 25 May 2021 01:24 - - {{hitsCtrl.values.hits}}
John Keells Holdings has reinforced its core character with its FY21 Annual Report emphasising “resilience in investing”.
Chairman Krishan Balendra said the Group has been on an investment heavy cycle, where significant capital has been deployed in Group businesses, paving the way for transformative growth in the future.
“However, despite the unprecedented events over the last two years, which significantly impacted the performance of our portfolio, these investments have continued steadfastly, demonstrating the Group's resilience in investing,” he said.
“While the investments had short-term impacts on performance over the last couple of years on account of related expenses, disruptions and gestation periods, the longer-term benefits are now translating to significant performance impacts in the relevant businesses, some of which are not fully visible in the reported results due to the offsetting impacts on account of disruptions across two consecutive years.”
Balendra said capital expenditure in recent years include investments aimed at ensuring a completed and refurbished portfolio of leisure properties, increasing the outlet footprint of the supermarket business – which has in the last three years doubled to over 120 outlets – enhancing the capacity and capability in the frozen confectionery and insurance businesses, and consolidating strategy in land banking enabling monetisation of lands to generate consistent returns, among others.
The most significant of the investments, ‘Cinnamon Life,’ is nearing completion with the revenue and profit recognition from the sale of the residential and office units commencing from the first quarter of 2021/22 onwards.
The JKH Chairman said investments going forward will include the West Container Terminal in the Port of Colombo in partnership with the Adani Group in India.
“This investment will ensure continued long-term exposure to the ports business in the country, which augers well for the future of the Group, as well as providing a better balance for our portfolio. I believe that, despite the challenges of the current environment, the Group has laid a strong platform for growth and is now poised to fully benefit from the investments in building capacity, capability and process efficiency, as these come to fruition in the ensuing year and beyond,” Balendra said.
With regard to the outlook, Balendra tells JKH shareholders in the FY21 Annual Report that the recent outbreak of COVID-19 cases in Sri Lanka has resulted in short-term uncertainty, although the business impact at this juncture for most Group businesses, excluding Leisure, is not as significant as witnessed with the previous outbreaks.
“Whilst it is premature to ascertain the scale of the restrictions that may follow due to this outbreak, the Group remains positive of the underlying fundamentals of the industry groups in which it operates and expects a similar recovery to the traction observed in the second and fourth quarters of 2020/21 once isolation measures are eased,” Balendra added.
