Exchange losses hurt Jetwing Symphony bottom line in 3Q
More guests continued to patronize Jetwing Symphony PLC’S resorts and city hotel as the group made higher revenues and operating profits although a loss from the conversion of a foreign currency loan turned the group’s bottom line into negative.
Jetwing Symphony, the operator of four resorts and a city hotel in Colombo 7, increased revenues by 37 percent year-on-year (YOY) to Rs.484.2 million during the three months ended December 31, 2018 (3Q19), the interim financial accounts showed.
The gross profit rose by 40 percent YOY to Rs.404.5 million as the properties continued to push the gross profit margins at all of its properties above 75 percent, said the group Chairman Hiran Cooray. This is despite July-december being the typical off-season in Sri Lanka’s tourism industry, the company said in a note to quarterly earnings.the group gross margin for the third quarter rose to 84 percent, from 82 percent YOY, as the hotel properties fetched higher average room rates during the quarter, compared the corresponding quarter, last year. Jetwing Symphony owns and manages four premium resorts — Jetwing Yala, Jetwing Lake, Jetwing Kaduruketha and Jetwing Surf. Apart from those, the group also operates the city hotel, Jetwing Colombo Seven.
The group reported earnings before interest, tax, depreciation and amortization (EBIDTA) of Rs.163 million for the quarter and EBIT of Rs.82 million, the earnings release stated.
“All Jetwing Symphony hotels, with the exception of Jetwing Surf, recorded positive EBITDA and EBIT figures,” Cooray stated.
Jetwing Kaduruketha and Jetwing Colombo Seven saw slight drops in overall occupancy levels due to the reduction in the number of online travel agency bookings and free independent tourist bookings, as a result of the political situation that prevailed in the country during the quarter.
Jetwing Surf in Arugam Bay recorded negative EBITDA and EBIT due to reduced occupancy as a result of the off season in Arugam Bay
Jetwing Kandy Gallery, the latest addition to the Symphony group, is currently underway with about 80 percent of the overall sub-structure and 30 percent of the super-structure work completed.
However, for the quarter under review, Jetwing Symphony reported negative earnings of 26 cents a share or a loss of Rs.128.5 million compared to a negative 23 cents a share or a loss of Rs.105.2 million reported for the corresponding period in 2017, due to a substantial exchange loss, resulting from the conversion of a foreign currency loan.
Sri Lanka’s rupee depreciated by 19 percent in 2018, of which 7.9 percent weakness occurred during the December quarter, as the October 26 political crisis triggered mass scale foreign selling of government securities and stocks.
For the quarter under review, the Jetwing Symphony booked a foreign exchange conversion loss of Rs.98.6 million. The conversion loss for the nine months ended December 31 was Rs.199.7 million.
For the nine months, the Jetwing Symphony group reported negative earnings of 73 cents a share or a loss of Rs.365.4 million, compared to negative earnings of 75 cents a share or a loss of Rs.338.3 million reported for the same period, last year.the company’s share was trading around Rs.10.30 yesterday.
In December 2017, Jetwing Symphony raised Rs.753.3 million, offering 50.2 million shares to the public, at Rs.15 each.
As of December 2018, the Employees’ Provident Fund held a 7.06 percent stake in the company being its fourth largest shareholder.