John Keells Group records strong Q1 performance; Q1 EBITDA at Rs.4.76 bn

The profit attributable to the equity holders of John Keells Group is Rs.1.53 billion for the three months ended 30 June, compared to a negative Rs.1.66 billion in the corresponding period of the previous financial year, interim accounts showed.

Summarised below are the key operational and financial highlights of performance during the quarter under review:

• Group EBITDA recorded a significant improvement to Rs.4.76 billion during the quarter under review, which is a 494 per cent increase against the comparative period [2020/21 Q1: Rs.802 million].

• The comparative performance with the first quarter in the previous year is distorted since there were varying impacts on account of the travel restrictions due to the third wave to the Group’s businesses in the current year although the country had an island-wide lockdown for a similar length of time.

• The Group’s businesses, except for Consumer Foods, recorded an improvement in profitability compared to the first quarter of the previous year.

• Since the easing of the restrictions from early July 2021, barring inter-provincial travel for non-essential services, business activity has seen a strong recovery to ‘near normal’ levels.

• The handover process of the residential apartment units at ‘Cinnamon Life’ commenced, resulting in the recognition of revenue and profits from sales for the first time in the project.

• The Group’s Port business, SAGT, recorded an increase in profitability against the corresponding period of the previous financial year driven by an encouraging double-digit growth in volumes since the third wave had a limited impact on port activity and demand unlike with the onset of the pandemic in the first quarter of last year.

• Further to the execution of a Letter of Intent (LOI) to develop and operate the West Container Terminal in the Port of Colombo, work is progressing well towards meeting the conditions stipulated in the LOI, including finalisation of the project design and costs and other structuring arrangements.

• The performance of the Supermarket business continued its strong quarter-on-quarter recovery momentum with same store sales recording double-digit growth prior to the outbreak of the third wave, with the month of April 2021 recording higher than anticipated sales.

• The Office Automation business recorded a strong increase in profitability driven by a triple-digit growth in volumes in the mobile phone segment, with sales crossing over two billion rupees in the month of June 2021.

• The Beverages, Frozen Confectionery and Convenience Foods businesses continued their strong recovery momentum as all three segments recorded double digit growth in volumes. While this growth in volumes and revenue translated to higher gross profits, the overall profitability of the industry group was impacted due to higher selling and distribution expenses and, to a lesser extent, increased factory related costs due to COVID-19 health and safety protocols.

• The Maldivian Resorts segment continued its recovery momentum from the previous quarter where the occupancies at our hotels were higher than anticipated during this quarter, while the forward bookings continue to be very encouraging.

• Nations Trust Bank PLC recorded an increase in profitability driven by robust loan growth and lower impairment charges despite the impact on margins. Union Assurance PLC recorded an increase in profitability driven by encouraging growth in all channels.

• The Group’s carbon footprint per million rupees of revenue decreased by 21 per cent to 0.59 MT while the water withdrawal per million rupees of revenue decreased by 34 per cent to 12.10 cubic metres.