Key segments boost John Keells December profits to Rs.5.1bn

Premier blue chip John Keells Holdings PLC saw its December quarter (3Q17) performance bolstered by its key business segments transport; leisure, retail and financial services, but the property segment saw a dent until the new projects under construction start contributing to the finances. 
For the December quarter, the group made a profit of Rs.3.73 a share or Rs.5.1 billion, which is an increase of 32 percent over the previous year, while the revenue rose by 12 percent to Rs.27.9 billion, 
an increase of 14 percent.  Net profit during the nine months to December 31, 2016 rose by 18 percent year-on-year (YoY) to Rs.8.24 a share or Rs.11.3 billion. The revenue was up 11 percent YoY to Rs.76.4 billion. The JKH share ended 40 cents or 0.29 percent up at Rs.137.90 at yesterday’s trading close.

During the quarter, the group transport unit earned a net profit of Rs.817.5 million, virtually doubling from what it earned during the same quarter last year. 
While the Colombo port witnessed a growth of 11 percent YoY in volumes, JKH managed South Asia Gateway Terminals (SAGT) recorded growth in throughput of 19 percent, according to JKH Chairman Susantha Ratnayake.
Further the group’s bunkering business saw double digit growth in volumes and improved margins. The logistics operations also saw a boost due to increase inw throughput in its warehouse facilities. This segment earned a revenue of Rs.3.3 billion, up from Rs.2.29 billion a year ago. 
JKH’s leisure business saw its bottom line increasing by 10 percent YoY to Rs.1.2 billion due to increased occupancy levels among its Sri Lankan and Maldivian resorts. This segment earned revenue of Rs.6.5 billion against Rs.6.2 billion earned a year ago. 
Consumer foods and retail business of the group saw its earnings rising by 20 percent during the December quarter up to Rs. 908.4 million supported by volume and margin growth in the frozen food and beverage business and the steady growth in footfall in its Keells Super outlets. Now JKH has 61 such outlets. 
JKH’s retail business brought in the largest revenue by a single segment as the revenue increased to Rs.11.9 billion from Rs.9.5 billion from a year ago.
JKH’s financial services business, which mainly consists of the licensed commercial bank, Nations Trust Bank PLC and Union Assurance PLC, saw profits rising by 18 percent YoY to Rs.1.14 billion, supported by robust growth in loans in the bank and double digit growth in premiums in the insurance company. 
The group property unit saw its earnings declining to Rs.190.4 million from Rs.542 million earned during the corresponding period of the last year because of the recognition of substantial amount of revenue originating from JKH’s Gregory’s Road residential development, ‘7th Sense.’ 
Last year, the segment reported a revenue of Rs.2.2 billion, which came down during 3Q17 to just Rs.540.1 million.  
“The construction of Cinnamon Life is in progress with pre-sales of both the residential and commercial space continuing to be encouraging,” Ratnayake said in reference to the group’s flagship mixed development project in the Glennie Street. 
He also said the group’s plantation sector improved the profits due to increased prices and operational efficiencies. 
As at December 31, 2017 Broga Hill Investments Limited held 10.2 percent stake of JKH, down from 10.4 percent three months ago, while S.E. Captain held 9.9 percent compared 10.1 percent he held in September. 
Being the third largest shareholder Paints & General Industries Ltd. a party connected to the Captain family held 8.1 percent stake, down from 8.3 percent. 
In early January, net foreign selling of over 5.2 million shares was seen in JKH and Aberdeen fund is believed to be among the sellers.