JKH March earnings up 10% to Rs.5bn; full year net up 16%

Sri Lanka’s premier blue chip, John Keells Holdings PLC (JKH), which is currently building a massive mixed development project in the heart of Colombo, saw its net profit for the January-March quarter (4Q17) increasing 10 percent year-on-year (YoY) to Rs.5 billion.
The basic earnings per share (EPS) improved to Rs.3.59 from Rs.3.32 YoY. The JKH share yesterday fell 0.65 percent to close at Rs.168.60.
The group revenue rose 19 percent YoY to Rs.29.8 billion but cost of sales rose at the faster pace of 31 percent YoY to Rs.21.4 billion, resulting in a gross profit of Rs.8.4 billion, down 3 percent YoY.
However, higher other operating income and reduced selling and distribution expenses chipped in, allowing the diversified group to report an operating profit of Rs.4.7 billion, up by just 1.0 percent.
The group managed to bring down its finance costs by 82 percent YoY to Rs.125 million while the finance income rose 18 percent YoY Rs.2.7 billion.
The group’s tax expenses grew 40 percent YoY to Rs.1.8 billion for the quarter.
An analysis of the group’s business segments showed transportation segment posting a post-tax profit of Rs.816 million against Rs.704 million YoY over a revenue of Rs.3.5 billion against Rs.2 billion YoY.
The group carries out bunkering and logistics business under the transportation segment and is a shareholder of South Asia Gateway Terminal, the first private sector terminal operator at the Colombo port.
The leisure segment reported an after-tax profit of Rs.2.1 billion slightly up from Rs.2 billion YoY over a revenue of Rs.8.1 billion compared to Rs.7.5 billion YoY. The group has an extensive portfolio of city hotels and resorts in Sri Lanka under ‘Cinnamon’ brand and also has properties in Maldives.
The group’s property business however recorded a lower profit of Rs.344 million
compared to Rs.590 million YoY. The revenue of the segment too slumped to Rs.224 million against Rs.688 million YoY.
The consumer food and retail segment also saw lower profits for the quarter—Rs.920 million against Rs.1.1 billion YoY—despite revenue growing to Rs.11.7 million fromRs.10.3 billion. 
The financial services segment, which comprises of Nations Trust Bank, Union Assurance life business and the stock brokerage, reported a post-tax profit of Rs.457.5 billion, up from Rs.278 million over a revenue of Rs.2.2 billion.
The group’s information technology segment reported a post-tax profit of Rs.184 million for the quarter under review against a post-tax loss of Rs.39 million YoY. The revenue also rose to Rs.3.5 billion from Rs.2.2 billion YoY.
Meanwhile, for the financial year ended March 31, 2017 (FY17), the group reported earnings of Rs.11.85 a share or Rs.16.3 billion, increasing its net profit 16 percent YoY.
The revenue also rose by 16 percent YoY to Rs.68.2 billion.
As at March 31, 2017, S.E.Captain held 10.8 percent of the shares of JKH, being the single largest shareholder while Broga Hill Investments, the special investment vehicle of Malaysia’s Khazanah, the investment fund of the Malaysian government, held 10.2 percent. 
The new entrant, Edgbaston Asian Equity Trust, held 1.0 percent of the shares being 16th largest shareholder.