John Keells Hotels December profits up

John Keells Hotels PLC recorded improved financial performance for the December quarter as its Sri Lankan city hotels and Maldivian resorts showed improved occupancy, the parent company John Keells Holdings said in an earnings release. 
The company made earnings of 27 cents a share or Rs.391 million, recording an increase of 7 percent from a year ago. The revenues rose by 8 percent year-on-year (YoY) to Rs.3.1 billion.  The earnings for the nine-month period ended December 31, 2016, was 56 cents a share, down slightly from 58 cents a share. The revenues topped Rs.8.6 billion recording an increase of 6 percent YoY. John Keells Hotels operates 1,337 four and five-star rooms in 11 properties, both in Sri Lanka and Maldives under its ‘Cinnamon’ brand.
During most part of last year, its Maldivian resort sector was adversely affected by the low occupancy mainly due to slower tourist arrivals— mainly from China –and also due to the political tensions in the archipelago.
However lately, Maldives tourism industry has been showing signs of bouncing back with Chinese arrivals also picking up. 
For November, total arrivals to the archipelago surged 16 percent YoY to 104, 572, its highest in 2016, bringing the total arrivals during the first 11 months to 1.17 million, up 4.6 percent YoY. John Keells Hotels appears to be a beneficiary of this positive trend as the company’s Maldivian resort sector made an after-tax profit of Rs.228 million, up 5 percent YoY.

The segment revenues also rose by 7 percent YoY to Rs.1.67 billion. Meanwhile,  John Keells Hotels subsidiary, Tranquility (Pvt) Ltd, paid US$ 15 million to Yacht Tours Maldives (Pvt) Ltd and another US$ 1.5 million to the Ministry of Tourism of Republic of Maldives in December 2016 in order to extend head lease rights of Dhonveli Island from August 26, 2028, to April 16, 2045, a note to the interim financial said.  Further, the company said they had contracted but not incurred Rs.4.0 million in capital commitments to its Kakaahura Hotel project in Maldives as of December 31, 2016. A further US $ 13.5 million on the same project has been approved but not yet contracted. 
Meanwhile, the company’s Sri Lankan resorts segment showed increased performance as a result of improved occupancy coupled with operational efficiencies and resulting cost savings. 
The segment’s after-tax profit rose by 10 percent YoY to Rs.166.2 million on a revenue of Rs.1.45 million, which was up by 8 
percent YoY. 
The company said it contracted but not incurred a sum of Rs.58 million as capital commitments for a hotel project in Nuwara Eliya. Another Rs. 3.718 billion has been approved for the project by the end of December 2016 but is yet to be contracted. 
As of December 31, 2016, John Keells Holdings held 80.32 percent stake in the company followed by a 5.39 percent stake by the Employees’ 
Provident Fund.