Profit before tax amounted to Rs. 2.40 billion, an increase of 42 percent from Rs. 1.68 billion a year ago, while the profit attributable to equity holders for the quarter amounted to Rs. 1.66 billion, up 34 percent from Rs. 1.24 billion the previous year, the company said releasing interim financial results yesterday.
The revenue at Rs. 20.01 billion in the first quarter of the financial year 2012/13 was 26 percent above the Rs. 15.88 billion recorded in the corresponding period in the previous year. The Company PBT of Rs. 2.24 billion for the quarter was significantly above the Rs. 1.02 billion recorded a year earlier.
"Although the performance of the Group in the first quarter is encouraging, its sustenance in the immediate future will be challenging as the increased input costs emanating mainly from the impact of the depreciation of the Rupee, higher duties and tariffs on imported items and the increase in fuel and electricity tariffs begin to take effect. A variety of steps, and measures, have been taken to mitigate these impacts," JKH Chairman Susantha Ratnayake said.
"The Leisure industry group PBT of Rs. 648 million was an increase of 73 percent over the first quarter of 2011/12 [2011/12 Q1: Rs. 374 million]. The enhanced PBT of the Leisure group was primarily driven by the performance of the City Hotels and Maldivian Resorts sectors. The performance of the City Hotels sector was strong with both Cinnamon Grand and Cinnamon Lakeside witnessing continued growth. The occupancies of Sri Lankan Resorts were below expectations. However, this fall was compensated to a certain extent by higher average room rates. We continue to reiterate the need for a concerted marketing campaign to create greater awareness of the destination to support the medium to long term sustainability of the industry. In the Maldivian Resorts, higher occupancies coupled with cost saving initiatives resulted in improved results," Ratnayake said.
"The Property industry group PBT of Rs. 65 million was 24 per cent below that recorded in the first quarter of 2011/12 [2011/12 Q1: Rs. 85 million]. The "OnThree20" project is on schedule with over 30 per cent of the construction completed as at 30th June 2012. Construction of a mall in Kapuwatta, Ja-Ela commenced in June 2012 and it is expected to be completed, and ready for occupation, by December 2012.
"The Consumer Foods and Retail industry group PBT of Rs. 393 million was an increase of 92 per cent over the first quarter of 2011/12 [2011/12 Q1: Rs. 204 million]. While the ice cream business recorded a growth in volumes compared to the corresponding period last year, the carbonated soft drinks business volumes were maintained in a market which showed little or no real growth. The processed meats business is close to finalising the acquisition of the production facility of D&W Foods Limited. Keells Food Products PLC has announced a 2 for 1 rights issue at Rs. 60/- per share, with the intention of raising Rs. 1.02 billion which will be used for the D&W acquisition and in financing the increased working capital. During the quarter under review, the Retail business was profitable compared with a loss in the corresponding period last year, primarily as a result of higher footfalls. .
The Financial Services industry group PBT of Rs. 257 million was a marginal increase of 5 per cent over the first quarter of 2011/12 [2011/12 Q1: Rs. 245 million]. During the quarter, Nations Trust Bank achieved strong profit growth and continued to be the primary contributor to the Financial Services industry group. The PBT of the Insurance business saw steady growth during the quarter under review. The Stock Brokering business was significantly impacted as a result of the lower level of activity which prevailed at the Colombo Stock Exchange.
"The Information Technology Services industry group consolidated its position by achieving a PBT of Rs. 6 million over the first quarter of 2011/12 following two consecutive years of losses [2011/12 Q1: loss of Rs. 20 million]. The Office Automation business (JKOA) remained as the major contributor to the IT industry group profits, although profits did see a decline as compared to the corresponding period in the previous year. Sales were adversely affected due to the increased product cost. The Business Process
Outsourcing business in India expanded its volumes through the acquisition of new customers and as a result achieved higher revenues as compared to the corresponding period of the previous year.
"Other, comprising of Plantation Services, John Keells Capital and the Corporate Centre, recorded a profit of Rs. 72 million for the quarter ended 30 June 2012 [2011/12 Q1: Rs. 78 million] The contribution from the Plantation Services business improved on account of higher average sales price for tea."