One-off gains boost JKH 4Q; but tough operating conditions weigh on performance
Despite significantly higher profits recorded by the Sri Lanka’s premier blue chip John Keells Holdings PLC (JKH) due to one-off gains stemming from the group’s financial services sector, the interim financial accounts released to the Colombo bourse indicated tough times faced by the group’s key business segments.
According to the financial accounts, JKH reported a revenue of Rs.33.6 billion for the January - March quarter (4Q18), up 12 percent year-onyear (YOY). But the operating profits declined by 11 percent YOY to Rs.4.2 billion, reflecting operating challenges faced by the group.
The group’s key businesses— transportation, leisure and consumer foods & retail— showed negative growth in their operations and after-tax profits for the quarter under review.
The only exceptions were the group’s financial services and property sectors which reported higher bottom lines with the former uplifting the group profits with a hefty nonrecurring one-off surplus of Rs.3.38 billion relating to its life insurance business, Union Assurance PLC.
Dampened business sentiment, heightened political uncertainty, weakening disposable incomes affected business performance, while the ongoing projects in certain business segments may have dented the profits—particularly in leisure and property.
Group’s consumer foods and retail business reported Rs.13.9 billion in revenue, higher than the Rs.11.7 billion in the corresponding quarter last year, but the operating profit declined to Rs.944.1 million from Rs.1.1 billion a year ago.