John Keells Hotels loses Rs263Mn for quarter, continues serial under-performance

July 27, 2018 (LBO) - Colombo Stock Exchange listed John Keells Hotels (KHL) reported weak results for the quarter ended June 2018.  The company lost Rs263mn in the quarter, a seasonally weak one for Sri Lanka tourism. The company had approximately a 50/50 split of revenue between Sri Lanka and the Maldives in the quarter.  The Sri Lankan segment reported losses of close to Rs60mn, while the Maldives properties reported losses of approximately Rs200mn in the quarter.  Losses in the Maldives were impacted by the closure and partial closure of 2 resorts for refurbishment. John Keells Hotels (KHL) is the subsidiary of John Keells Holdings (JKH) which owns the group's resort properties. The focus of these properties is on tourism outside of the capital Colombo, as well as the Maldives. KHL has suffered from poor returns on equity compared to the group's cost of capital.  ROE for the year ended March 31st 2018 was under 5%, while in the year prior ROE was under 8%.  Analysts say the ROE for this year is likely to be weak as well. The stock is currently trading at Rs8.5, less than half its book value of Rs18/share.