“Resilient performance by JKH in second quarter as Group EBITDA excluding Leisure grows by 15 per cent; businesses display strong recovery momentum” Sri Lanka’s foremost conglomerate, John Keells Holdings (JKH), showed resilient performance in second quarter as Group EBITDA excluding Leisure grew by 15% and businesses displayed strong recovery momentum. Company’s Chairman, Krishan Balendra said in his review, Group EBITDA excluding the Leisure industry group was Rs.4.50 billion during the second quarter of the year under review, which is a 15% increase against the previous year [2019/20 Q2: Rs.3.91 billion] and as a result JKH described 2Q performance as resilient. JKH Group revenue at Rs.32.39 billion for the quarter under review is a decrease of 4% against the comparative period of last year [2019/20 Q2: Rs.33.70 billion]. Cumulative Group revenue for the first half of the year under review at Rs.53.99 billion is a decrease of 17% against the revenue of Rs.65.44 billion recorded in the corresponding period of financial year 2019/20. Group earnings before interest expense, tax, depreciation and amortisation (EBITDA) at Rs.3.32 billion in the second quarter of the financial year 2020/21 is an 18% decrease against Group EBITDA of Rs.4.02 billion recorded in the previous financial year. Cumulative Group EBITDA for the first half of the financial year 2020/21 at Rs.4.12 billion is a 46% decrease against the EBITDA of Rs.7.59 billion recorded in the same period of financial year 2019/20. Group profit before tax (PBT) at Rs.636 million in the quarter under review is a 76% decrease against the Rs.2.60 billion recorded in the second quarter of 2019/20. Cumulative PBT for the first half of the financial year 2020/21 at a negative Rs.1.79 billion is a 145% decrease against the PBT of Rs.3.96 billion recorded in the comparative period of the previous financial year. Profit attributable to equity holders of the parent at Rs.680 million in the quarter under review is a 70% decrease against the comparative quarter [2019/20 Q2: Rs.2.29 billion]. On a cumulative basis, profit attributable to equity holders of the parent is a negative Rs.978 million, a 130% decrease against the comparative period. Company PBT for the second quarter of 2020/21 at Rs.1.40 billion is a 22% increase against the Rs.1.15 billion recorded in the corresponding period of 2019/20. Company PBT for the first half of the financial year 2020/21 at Rs.2.31 billion is a 20% decrease against the corresponding period of 2019/20. However, During the quarter under review, the Group witnessed a faster than anticipated recovery momentum with the performance of most businesses reaching close to pre COVID-19 levels with business activity and consumer trends being near normal. This positive momentum is reflected in the performance of the Group excluding Leisure. “The underlying performance of the Transportation, Consumer Foods, Retail and Financial Services industry groups continued its growth momentum witnessed in the latter part of the previous quarter, demonstrating a faster than anticipated recovery following the resumption of business activity in the country post the easing of lockdowns in May 2020,” Balendra said. “Group EBITDA excluding the Leisure industry group was Rs.4.50 billion during the second quarter of the year under review, which is a 15% increase against the previous year [2019/20 Q2: Rs.3.91 billion],” he added. Balendra further stated that given the strong recovery momentum in business activity and the generation of cash profits by the Group, a second interim dividend of Rs.0.50 per share, amounting to a payout of Rs.659 million, was declared to be paid on or before 7 December 2020. The declaration of this dividend reflects the cash generation capability of the Group’s diverse portfolio of businesses. “The Leisure industry group continued to be impacted by the closure of the airport in Sri Lanka, although this has been mitigated, to an extent, by a resumption in domestic tourism, recovery in the banqueting, food and beverage segments and the opening of the airport in the Maldives in mid-July,” Balendra said. He further stated that the Frozen Confectionery, Beverage and Convenience Foods businesses has recorded double-digit growth in EBITDA against the corresponding period of the previous quarter, continuing the trajectory witnessed in June. “The Supermarket business continued its positive momentum with a strong rebound in sales and EBITDA, driven by the contribution from new outlets towards revenue growth and a pick-up in same store footfall post the easing of lockdown measures witnessed in the first quarter,” he said. The Transportation industry group EBITDA at Rs.929 million in the second quarter of 2020/21 is a decrease of 16% against the EBITDA of the comparative period [2019/20 Q2: Rs.1.11 billion]. The decline in profitability is attributable to the performance of the Group’s Bunkering business, Lanka Marine Services (LMS), and the Ports business, South Asia Gateway Terminals (SAGT). “Pace of construction at ‘Cinnamon Life’ continued to gain traction during the quarter,” he said. “Post ascertaining the impact of COVID-19 on the overall timelines of the project to manage deliverables and the re-sequencing of work, it is expected that the hand-over of the residential apartments and office tower will commence on a staggered basis from the fourth quarter of 2020/21 onwards,” He added. John Keells Holdings PLC, a Sri Lankan company, is also the largest company listed on the Colombo Stock Exchange, which operates over 70 companies in 7 diverse industry sectors, and, in 2020, commemorates 150 years of being in business. The Group provides employment to over 14,000 persons and has been ranked as Sri Lanka’s ‘Most Respected Entity’ for 14 years. Whilst being a full member of the World Economic Forum and a Member of the UN Global Compact, John Keells Group drives its vision of “empowering the nation for tomorrow,” through the John Keells Foundation and through the social entrepreneurship initiative, ‘Plastic cycle’, is a catalyst in scientifically reducing plastic pollution in Sri Lanka.
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