JKH ups pre-tax profit by 9% to Rs. 15 b

Wednesday, 28 May 2014 00:01 - - {{hitsCtrl.values.hits}}

Recurring profit attributable to equity holders up 9% to Rs.11.34 b; Group post-tax profit down by 3% to RS. 13 b
Group revenue in FY14 improves by 5% to Rs. 89 billion

Premier blue chip John Keells Holdings (JKH) yesterday announced a commendable 9% increase in consolidated recurring profit before tax (PBT) and recurring attributable profits to equity holders for the financial year 2013/14 As per interim results released yesterday JKH Group recurring profit before tax (PBT) for the financial year 2013/2014, excluding the fair value gains on investment property was Rs.14.93 billion, an increase of 9% over the recurring PBT of Rs.13.65 billion recorded in the previous year. The recurring profit attributable to equity holders of the parent was Rs.11.34 billion, representing an increase of 9% over the Rs.10.45 billion recorded in the previous year.

The Group profit before tax (PBT) was Rs 15.40 billion while the Group profit after tax was Rs 13.01 billion. Profit attributable to equity holders of the parent was Rs. 11.7 billion, down by 3% over FY13. Revenue for the financial year 2013/14 was Rs.89.26 billion, an increase of 5% over the Rs.85.41 billion recorded in the previous financial year. The JKH Board also declared a final dividend of Rs 1.50 per share. This is on top first and second interim dividends of Re. 1 each paid in November 2013 and March 2014. FY14 saw net finance income grow by 24% to Rs. 4.6 billion. Other operating income rose by 66% to Rs. 2.48 billion on account of capital gains arising from sale of certain investments. The change in fair value of investment property was Rs. 470 million, as opposed to Rs. 2 billion in FY13. JKH’s tax expenses rose by 9% to Rs. 2.4 billion. Leisure (Rs. 5.4 billion profit before tax), property (Rs. 1.3 billion) and financial services (Rs. 1.63 billion) as well as IT sectors reported improved profits whilst others including the once dominant transportation business and the consumer foods and retail saw dip in profits. Transport sector also suffered a dip in revenue from Rs. 19.78 billion in FY13 to Rs. 17.1 billion in FY14. Its pre-tax profits were down to Rs. 2.67 billion as opposed to Rs. 3.38 billion in FY13. In February 2014, the Group disposed of its interest in one of its associates, Central Hospitals Ltd., with a capital gain of Rs. 655 million whilst in February this year the Group divested its voting shares in one of its joint ventures, Information Systems Associates with a capital gain of Rs. 158 million. In June last year as per sales and purchase agreement the Group disposed of its interest in one of its associates, NDO India Ltd., with a Rs. 12 million loss. A key future focus is on JKH’s upcoming flagship project ‘The Waterfront’ (WPL) the $ 650 million integrated resort which is scheduled to be completed by early 2018. Korea’s largest builder Hyundai Engineering & Construction Co Ltd. won the contract worth $ 339.30 million. At an Extraordinary General Meeting held in August 2013, the shareholders granted approval by special resolution for the JKH investment in WPL, as a major transaction, and for JKH to take such necessary actions, among others, to commence and execute the project, including raising debt, providing security thereof and guaranteeing or indemnifying the performance obligations of WPL. The proceeds from the issue of Rs. 13 billion Rights are to be utilised towards JKH’s investment in WPL. In April 2014, the project company, WPL received approval for the Project from the Parliament of Sri Lanka, under the Strategic Development of Project Act No. 14 of 2008 as published in Gazette dated 30 January 2014. The Project site has been handed over to the contractor and construction has commenced. JKH’s 2013/14 Annual Report is to be released next week which will have more details on financial, environmental and social performance.