30 October 2018 12:00 am
John Keells Hotels PLC, the resort sector arm of the John Keells group, saw its earnings for the September quarter (2Q19) falling almost 100 percent amid the closure of three resort hotels for refurbishments.
According to the company’s interim financial accounts released to the Colombo Stock Exchange, the net profit for the period fell 99 percent year-on-year (YoY) to Rs.850 million on revenue of Rs.2.4 billion, down 5 percent YoY.
The resort hotel company operates seven hotels and 864 guest rooms in Sri Lanka and three hotels and 340 guest rooms in the Maldives.
On July 1, 2017, Bentota Beach by Cinnamon was closed by the company for complete redevelopment and is slated to be opened only in November 2019.
Meanwhile, on May 1, 2018, the company also closed its Maldivian resort Cinnamon Hakuraa Huraa for refurbishment.
In June 2018, the company partially closed another Maldivian resort, Ellaidhoo Maldives by Cinnamon, for refurbishment.
The company said the refurbishment work on Ellaidhoo Maldives by Cinnamon was completed on October 20, 2018.
The company said as of June 30, 2018, it had contracted but not incurred capital commitments of Rs.3.08 billion, US $ 14.3 million and US $ 0.23 million for the three hotels, respectively.
The company further has approved but not contracted capital commitments of Rs.3.72 billion for its Nuwara Eliya Hotel Project and US $ 0.5 million for the Ellaidhoo Maldives by Cinnamon refurbishment project.
Meanwhile, due to the closure of the Cinnamon Hakuraa Huraa Maldives resort, the company had to recognize a non-recurring expense of Rs.175 million arising from an impairment of non-financial assets attached to the property.
As at September 30, 2018, John Keells Holdings PLC held an 80.32 percent stake in John Keells Hotels, while the Employees’ Provident Fund held another 5.39 percent stake being the second largest shareholder in the company.