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John Keells records 180% EBITDA growth in Q1

28 Jul 2022

  • Maldivian resort segment, Colombo Hotel chains register significant turnaround
  • Rupee depreciation drives bunkering business to record steep increase in profits
    John Keells Holdings (JKH), announcing its financial results for the first quarter of 2021/2022, stated that Group EBITDA recorded a significant improvement to Rs.13.33 billion during the period, which is an increase of 180% against the comparative period of last year. The first quarter of the previous year was partially disrupted on account of the  lockdowns due to the pandemic.   The leisure industry group, in particular, recorded a turnaround in performance, reporting an EBITDA of Rs.1.87 billion compared to the negative EBITDA of Rs.649 million in the corresponding quarter of the previous year. The strong performance of the Maldivian resorts and destination management segments, and a better performance in the Colombo hotels segment, were the main contributors to the turnaround in performance. Despite the challenging and uncertain operating environment, which was characterised by numerous  supply chain disruptions, foreign exchange limitations, power disruptions, and fuel shortages, the group’s businesses recorded strong growth in profitability compared to the first quarter of the previous year on the back of a continued recovery momentum with most businesses reaching pre-pandemic levels.  The group’s bunkering business recorded a significant increase in profitability in its core ship  bunkering operations driven by higher margins on account of the steep increase in fuel oil prices and volumes, whilst the profitability of the group’s ports and shipping business recorded an increase as a result of higher revenue from ancillary operations and the translation impact due to the depreciation of the rupee. The consumer foods industry group continued its strong recovery momentum, with all three segments recording strong double-digit growth in volumes off a partially pandemic affected base. Volumes continue to exceed pre-pandemic levels.  The supermarket business recorded a strong performance with same store sales recording encouraging growth driven by a combination of higher basket values due to high inflation and, notably, an increase in customer footfall compared to the comparative quarter, which was impacted by the pandemic.   The property industry group recorded a decline in EBITDA, as the first quarter of the previous year included revenue and profit recognition from the handover of the residential apartment units at  Cinnamon Life. The recognition of revenue of all units sold as at that date at Cinnamon Life was  completed by 31 March 2022. The insurance business recorded double-digit growth in gross written premiums. The banking business recorded an increase in profitability aided by an increase in net interest margins, loan growth, focused recovery efforts, and cost management initiatives.   As announced to the Colombo Stock Exchange, the company is in the process of concluding a  transaction to raise Rs. 27.06 billion, subject to shareholder approval, through a private placement of rupee-denominated convertible debentures to Fairfax, Canada.   The “SanNap” programme was rolled out across the group, under which sanitary napkins are provided free of-charge to all female employees whilst a trilingual module on LGBTIQ+ awareness was launched on the group’s e-learning platforms as a mandatory and annual refresher, and also as a part of the group induction.  In light of the current socio-economic crisis in Sri Lanka and hardships faced by people in the country, the group initiated several relief programmes to support vulnerable communities, covering areas such as the availability of food and nutrition, the adoption of sustainable agricultural practices to improve yields, and providing assistance towards mitigating the loss of educational opportunities for children.  The group’s carbon footprint per million rupees of revenue decreased by 38% to 0.37 MT, while the water withdrawal per million rupees of revenue decreased by 44% to 6.71 cubic metres.


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