Sri Lanka’s foremost conglomerate, John Keells Holdings (JKH) Group’s Profit After Taxation (PAT) at Rs. 16.24 billion for the Financial Year (FY) 2018/2019, is a decrease of 30% compared to PAT of Rs.23.12 billion reported during the Financial Year 2017/2018, the latest annual financials of the JKH highlights.

Accordingly the highest contributors to Group PAT were the Transportation, Financial Services, and other, including Information Technology and Plantation Services industry groups, with contributions of Rs.4.17 billion compared to Rs.3.08 billion in FY 2017/18, Rs.4.05 billion compared to Rs.8.57 billion in FY 2017/18 and Rs.3.86 billion compared to Rs.3.90 billion in FY 2017/18, respectively. JKH Group had further achieved the gains on investment property whilst the recurring Group PAT decreased by 28% to Rs.14.45 billion compared to Rs.19.96 billion in FY 2017/18.

In his annual review Chairman of JKH group Krishan Balendra adds that South Asia Gateway Terminals (SAGT), the Group’s Ports and Shipping business, maintained its growth momentum with a volume growth of 11% whilst the Frozen Confectionery business recorded a volume growth of 10%, despite difficult market conditions, driven by the Impulse segment and the expansion of its product portfolio, post the commissioning of the new factory. Further the Beverage business displayed signs of recovery and is expected to witness growth in volumes following price reductions, post the introduction of a threshold on the sugar tax, according to him.

During the financial year 2018/19, Group revenue had increased by 12% to Rs.135.46 billion while recurring Group earnings before interest expense, tax, depreciation and amortization (EBITDA) decreased by 11% to Rs.25.67 billion.

“The decline in recurring EBITDA was on account of the performance of the Leisure, Financial Services, Property and Retail industry groups, where we witnessed some one-off impacts in addition to the downturn in the performance of the City Hotels sector due to a significant increase in the room supply within a short period of time” Balendra adds in his review.

He further points out that the one-off impacts, which have not been eliminated in the recurring EBITDA, include the impact of the closure of "Cinnamon Hakuraa Huraa Maldives", which was operational in the previous financial year, recognition of higher investment property gains in the previous year and the costs associated with the refit and rebranding programme of the Supermarket business. He also notes that the construction of "Cinnamon Life" is continuing with encouraging momentum with the residential apartments and office tower slated for handover from March 2020 on wards.

- Reporting by Devendra Francis