John Keells Group records strong EBITDA of Rs.13.33 billion in Q1; Resilient performance despite macro challenges
“JKH records strong EBITDA of Rs.13.33 billion in Q1; Resilient performance despite macro challenges”
Summarised below are the key operational and financial highlights of our performance during the quarter under review:
- Group EBITDA recorded a significant improvement to Rs.13.33 billion during the quarter under review, which is an increase of 180 per cent against the comparative period of last year [2021/22 Q1: Rs.4.76 billion]. The first quarter of the previous year was partially disrupted on account of the lockdowns due to the pandemic.
- Despite the challenging and uncertain operating environment which was characterised by numerous supply chain disruptions, foreign exchange limitations, power disruptions and fuel shortages, the Group’s businesses recorded strong growth in profitability compared to the first quarter of the previous year on the back of a continued recovery momentum with most businesses reaching pre-pandemic levels.
- The Leisure industry group, in particular, recorded a turnaround in performance reporting an EBITDA of Rs.1.87 billion compared to the negative EBITDA of Rs.649 million in the corresponding quarter of the previous year. The strong performance of the Maldivian Resorts and Destination Management segments, and a better performance in the Colombo Hotels segment were the main contributors to the turnaround in performance.
- The Group’s Bunkering business recorded a significant increase in profitability in its core ship bunkering operations driven by higher margins on account of the steep increase in fuel oil prices and volumes, whilst the profitability of the Group’s Ports and Shipping business recorded an increase as a result of higher revenue from ancillary operations and the translation impact due to the depreciation of the Rupee.
- The Consumer Foods industry group continued its strong recovery momentum with all three segments recording strong double-digit growth in volumes off a partially pandemic affected base. Volumes continue to exceed pre-pandemic levels.
- The Supermarket business recorded a strong performance with same store sales recording encouraging growth driven by a combination of higher basket values due to high inflation and, notably, an increase in customer footfall compared to the comparative quarter which was impacted by the pandemic.
- The Property industry group recorded a decline in EBITDA as the first quarter of the previous year included revenue and profit recognition from the handover of the residential apartment units at ‘Cinnamon Life’. The recognition of revenue of all units sold as at that date at ‘Cinnamon Life’ was completed by 31 March 2022.
- The Insurance business recorded double digit growth in gross written premiums. The Banking business recorded an increase in profitability aided by an increase in net interest margins, loan growth, focused recovery efforts and cost management initiatives.
- As announced to the Colombo Stock Exchange, the Company is in the process of concluding a transaction to raise Rs.27.06 billion, subject to shareholder approval, through a private placement of LKR denominated convertible debentures to Fairfax, Canada.