Sri Lanka JKH retains ‘AAA(lka)’ rating

Aug 18, 2011 (LBO) – Sri Lanka’s John Keells Holding’s ‘AAA(lka)’ rating with a stable outlook was confirmed by Fitch Ratings which said the its gearing at holding company was low and dividends from operating units were strong. JKH’s record in funding acquisitions and expansion with a combination of pre-issued equity and retained profits helped the rating, Hasira De Silva, assistant vice president at Fitch Ratings Lanka said in a statement.

“The rating also reflects JKH’s strong liquidity position, well-spread-out debt maturities, and its exceptionally strong access to local banks and capital markets,” he said.

Fitch said in the 2011 financial year JKH’s revenues grew 26 percent to 60.5 billion rupees and earnings before interest tax depreciation and amortization (EBITDA) grew 51 percent to 7.7 billion rupees from a year earlier.

South Asia Gateway Terminal, 42 percent owned container terminal at Colombo Port brought 59 percent of total dividends, with leisure and property bringing 20 percent and financial services 10 percent.

A new container terminal at Colombo could cut into SAGT profits in the future, but Fitch says strong growth in regional transshipment could reduce the threat.

Over the medium JKH expected it leisure dividends to increase.