John Keells Holdings PLC (JKH) has announced an EBITDA of Rs. 7.7 billion for the first quarter of the 2024/25 financial year.
This represents a 13% decrease compared to the same period last year.
However, this figure includes significant pre-opening costs for the new ‘Cinnamon Life’ hotel at the ‘City of Dreams Sri Lanka’ project.
The previous year’s results benefited from a deferred tax credit at the South Asia Gateway Terminals (SAGT). Excluding these impacts, JKH’s EBITDA saw a 2% increase to Rs. 8.47 billion, up from Rs. 8.34 billion the first quarter of the previous financial year.
The company’s performance reflects a range of ongoing and upcoming initiatives. With Sri Lanka’s external debt restructuring progressing, the country’s credit rating is expected to improve following the international sovereign bond restructuring programme.
In a significant move, JKH announced a rights issue to raise approximately Rs. 24 billion. This will be followed by a sub-division of shares to facilitate further growth.
Construction at the City of Dreams is advancing, with the 687-room ‘Cinnamon Life’ hotel nearing completion and set to open in October 2024.
Other components of the project, including the ‘Nuwa’ hotel and gaming operations, are expected to be operational by mid-2025. Melco Resorts and Entertainment Limited has begun fitting out the gaming space following a 20-year lease agreement.
At the Port of Colombo, work on the West Container Terminal (WCT-1) is progressing with the first batch of quay and yard cranes scheduled for arrival in August 2024. The terminal’s first phase is anticipated to be operational by the fourth quarter of 2024/25.
In terms of financial performance, SAGT has seen increased profitability due to higher throughput, while Lanka Marine Services (LMS) reported volume growth despite margin pressure from volatile global fuel prices.
The beverages and frozen confectionery sectors both experienced improved EBITDA, driven by growth in margins and volumes. The supermarket business also performed strongly with a 12% increase in same-store sales, benefiting from higher customer footfall.
The leisure segment faced challenges from pre-opening costs at the ‘Cinnamon Life’ hotel and lower occupancy at Maldivian resorts. However, occupancy rates are expected to rise with the upcoming peak season.
In financial services, Nations Trust Bank PLC reported significant profitability growth, and Union Assurance PLC saw double-digit growth in gross written premiums.