Revenues grew 26 percent to 20.1 billion rupees, cost of sales grew 22 percent to 15.4 billion rupees and gross profits grew 41 percent to 4.5 billion rupees.

"Although the performance of the Group in the first quarter is encouraging, its sustenance in the immediate future will be challenging…," chairman Susanthe Ratnayake told shareholders.

He said input costs were rising with a weaker rupee, higher duties and tariffs on imported items and higher fuel and electricity tariffs.

The group containers and logistics division brought 957 million rupees in pre-tax profits, leisure 648 million rupees.

"The performance of the City Hotels sector was strong with both Cinnamon Grand and Cinnamon Lakeside witnessing continued growth," Ratnayake said.

" The occupancies of Sri Lankan Resorts were below expectations. However, this fall was compensated to a certain extent by higher average room rates.

"We continue to reiterate the need for a concerted marketing campaign to create greater awareness of the destination to support the medium to long term sustainability of the industry.

The property sector brought in 65 million rupees in pre-tax profits and retail brought 393 million rupees, financial services 257 million rupees and information technology 6 million rupees.

Update